The International Monetary Fund (IMF) says Sri Lanka’s performance under the Extended Fund Facility (EFF) program has remained broadly on track despite a series of weather-related supply shocks.
Following the Executive Board’s discussion of the third EFF review, Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director of IMF, said country’s fiscal performance has been satisfactory and all targets until September were met.
“Nevertheless, Sri Lanka’s high debt burden, large gross financing needs, and weak financial performance of state-owned enterprises increases the importance of further fiscal consolidation,” Furusawa said.
“Timely progress in structural reforms, including tax administration and energy pricing, will support fiscal consolidation.”
Sri Lanka’s budget targets a primary surplus of 1 percent of GDP and frontloads fiscal consolidation towards the authorities’ objective of reducing the overall fiscal deficit to 3.5 percent of GDP by 2020.
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