IMF, Sri Lanka reach staff-level agreement on second review of funding package

The International Monetary Fund (IMF) announced on Thursday that it had reached a staff-level agreement with the Sri Lankan authorities on economic policies to conclude the second review of the four-year programme and the 2024 Article IV Consultation.

Once the review is approved by IMF Management and completed by the IMF Executive Board, Sri Lanka will have access to SDR 254 million (about $337 million) in financing, bringing IMF financial support to a total of SDR 762 million (around $1 billion) under the four-year Extended Fund Facility (EFF)-supported programme.

“The authorities are making good progress in implementing an ambitious reform agenda under the EFF with commendable outcomes, including rapid disinflation, robust reserve accumulation, and initial signs of economic growth while preserving the stability of the financial system. Public finances have strengthened following substantial fiscal reforms.” the statement read.

“Programme performance was strong, with all quantitative performance criteria and indicative targets for end-December 2023 met except for the indicative target on social spending. Most structural benchmarks due before end-February 2024 were either met or implemented with delay. Reforms in some areas are still ongoing.”