IMF closely engaged with SL on tariff hike

• Reiterates it is critical for Sri Lanka to sustain reform momentum through remainder of this EFF programme

The International Monetary Fund (IMF) said it is closely working with the Sri Lankan authorities to assess the recent regulatory measures, including a 15 percent hike in electricity tariffs and the publication of revised bulk supply transaction account guidelines, both identified as prior actions under the country’s Extended Fund Facility (EFF) arrangement.

“Our IMF team, of course, is closely engaged with the authorities to assess the measures that were recently announced by the regulator on June 11. And these include a 15 percent increase in electricity tariffs and the publication of a revised bulk supply transaction account guidelines for this. So, these were two prior actions,” IMF spokesperson Julie Kozack said at a regular press briefing.

The measures are tied to the fourth review of Sri Lanka’s IMF-supported economic reform programme. On April 25, the IMF staff and Sri Lankan authorities reached a staff-level agreement on the review, which is pending Executive Board approval. Completion of the review would enable the disbursement of around US $ 344 million in funding.

“Performance under the programme remains strong overall and the government remains committed to programme objectives,” Kozack noted.

She added that the IMF is focused on ensuring that reform momentum continues throughout the life of the programme. 

“It’s going to be critical for Sri Lanka to sustain the reform momentum through the remainder of this EFF programme,” she said.

Kozack also pointed to broader improvements in the country’s macroeconomic indicators. She shared that the IMF sees a remarkable rebound in growth, following Sri Lanka’s crisis. Inflation is low, international reserves are continuing to grow, revenue collection on the fiscal side is improving and the debt restructuring process is nearly complete.

Meanwhile, IMF First Deputy Managing Director Gita Gopinath will visit Sri Lanka, Singapore and Indonesia in the coming days. She is scheduled to deliver the opening remarks at the ‘Sri Lanka Road to Recovery’ conference on June 16 and meet with the government officials and stakeholders during her visit.