Despite Delay in Disbursement of the Second Tranche State Minister of Finance Says Engagement with IMF “Positive”

September 29, 2023

President Ranil Wickremesinghe recently engaged in pivotal discussions with the International Monetary Fund (IMF) team currently conducting an economic assessment in Sri Lanka. During these talks, the IMF team expressed appreciation for the country's ongoing economic reforms, as stated by State Minister of Finance Shehan Semasinghe during a press briefing.

Semasinghe outlined that negotiations to secure a staff-level agreement would take place after President Wickremesinghe's return to Sri Lanka following his official visit to Germany. Additional discussions are scheduled under the President's leadership.

The IMF team's review of Sri Lanka's current financial situation has been largely positive. The government has reported a remarkable 43% growth in revenue compared to the previous year, primarily attributed to an enhanced tax collection process. The IMF has taken an active interest in government tax revenue and praised the nation's citizens for their role in implementing economic reforms.

The State Minister also addressed concerns about foreign debt optimization discussions. Contrary to claims of isolation, Sri Lanka remains engaged in productive negotiations with its foreign creditors. The government is confident that progress will be swift after completing domestic debt optimization.

Semasinghe emphasized the significant improvements in Sri Lanka's economic situation compared to a year ago. Inflation has dropped from 70% to 1.3%, providing a substantial boost to the country's economy. Additionally, interest rates on treasury bills in the domestic market have decreased from 30% to 13%, greatly benefiting the treasury.