Peter Breuer, the IMF’s Senior Mission Chief for Sri Lanka, commended Sri Lanka’s remarkable economic turnaround, stating that the country has made a tremendous recovery from its financial crisis and has a promising future ahead. Speaking at an online press briefing, following the approval of the fourth tranche of US$ 334 million under the Extended Fund Facility (EFF), Breuer suggested that it is time to reverse the brain drain as Sri Lanka is now becoming a more attractive place to live.
Sri Lanka’s economy grew by 5.5%, indicating a strong recovery, and the country has regained 40% of the income lost over the past five years due to the IMF program’s implementation. The latest tranche increases IMF funding to Sri Lanka to approximately US$ 1.3 billion. The IMF backed Sri Lanka’s cost-recovery electricity pricing, emphasizing the need to ensure financial stability in the power sector after January’s 20% tariff reduction.
Breuer underscored the importance of finalizing bilateral agreements with key creditors such as Japan, India, and China, following Sri Lanka’s preliminary agreement on debt servicing. He emphasized that Sri Lanka must boost tax revenue, improve social welfare targeting, and ensure efficient capital spending for better public finance management.
Katsiaryna Svirydzenka, Deputy Mission Chief for Sri Lanka, stressed that SOE restructuring is crucial to stabilizing the economy and reducing fiscal deficits. She noted that mismanaged SOEs lead to taxpayer burdens and financial instability, and highlighted the need for greater transparency, including the timely publication of audited SOE financial statements.
The IMF remains optimistic that Sri Lanka’s economic progress will lead to rising incomes and poverty reduction, opening up better domestic opportunities for its citizens. However, continued reforms are necessary to ensure long-term financial sustainability.
