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Government plans economic transformation law to ensure continuity of IMF Programme

March 25, Colombo (LNW): In response to concerns regarding the potential disruption of the current programme with the International Monetary Fund (IMF) in the event of a change in government, officials are devising a strategy to enact an economic transformation law.

This legislative measure aims to safeguard the sustainability of the project despite any political transitions, as stated by a minister.

The international community, notably Western nations, has stressed the significance of maintaining continuity with the economic reform programme supported by a 4-year Extended Fund Facility (EFF) arrangement.

Approved by the IMF Executive Board on March 20, 2023, the EFF arrangement entails a total allocation of US$3 billion.

In its latest assessment, the IMF, which conducted a mission, acknowledged the authorities’ commendable progress in implementing an ambitious reform agenda under the EFF.

This progress has yielded notable outcomes, including rapid disinflation, robust reserve accumulation, and initial signs of economic growth, all while preserving financial system stability.

However, the two primary opposition parties, the National People’s Power (NPP) and the Samagi Jana Balawegaya (SJB), have pledged to renegotiate the IMF agreement if they secure power in future elections.

With the Presidential election scheduled for later this year and ongoing discussions about a possible snap general election, there is heightened political uncertainty.

State Minister of Finance Shehan Semasinghe disclosed plans to introduce the new bill to Parliament in May of this year.

Describing it as an economic transformation law, Semasinghe emphasised that its enactment would provide legal backing to the programme, ensuring its sustainability.

Once enacted, the law would be binding on any ruling party, mandating its implementation regardless of political changes.

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