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US-EU slowdown to affect Lanka

16 Jun 2012 - {{hitsCtrl.values.hits}}

While saying that the economic slowdown in Europe and the United States would adversely affect Sri Lanka’s economy reducing the growth rate to 6.75 per cent this year, The International Monetary Fund (IMF), yesterday expressed its willingness to give further financial and technical assistance to Sri Lanka after the completion of the Stand by Arrangement of US$ 2.6 billion.

Upon conclusion of the IMF staff mission to Sri Lanka from June 4 to 15, Asia and Pacific Department Deputy Division Chief John Nelmes told journalists that inflation was likely to rise to the upper single digit level this year.

“Sri Lanka’s export market is in Europe and the United States. Certain things are beyond the control of Sri Lankan authorities,” he said.
Mr. Nelmes said a delegation would probably come in September to discuss further arrangements with the IMF.

Referring to the last tranche of the present Stand by Arrangement, he said it would be decided upon after a review of policy action and economic development in Washington.

Stressing that it is important for Sri Lanka to achieve the budget deficit target, Mr. Nelmes said the government’s revenue target was underperforming due to factors such as import cuts and the energy crisis.

In this case, he said, the IMF was ready to give technical assistance to Sri Lanka. While commending the government for making policy decisions to maintain flexible exchange rates and adjust fuel prices, he said the authorities were successfully implementing a bold package of policy measures to curb current account deficit and safeguard reserves.

“Credit growth has slowed and imports have declined ,” he said. (Kelum Bandara)

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US-EU slowdown to affect Lanka

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