22 March 2023 12:05 am Views - 512
In a special statement following the approval of the extended credit facility by the Executive Board of the International Monetary Fund (IMF), President Ranil Wickremesinghe yesterday emphasized that Sri Lanka is no longer deemed bankrupt by the world.
The President also stated that the loan facility serves as an assurance from the international community that Sri Lanka has the capacity to restructure its debt and resume normal transactions. President Wickremesinghe further said the agreement with the IMF will be tabled in Parliament shortly. This is Sri Lanka’s 17th IMF programme since its independence in 1948.
To clinch the IMF Board approval Sri Lanka has already implemented extremely tough reforms, which include sharp increase in tax rates, cost-reflective utility prices and steep expenditure cuts.
IMF Senior Mission Chief for Sri Lanka Peter Breuer yesterday said that it is now essential to continue the reform momentum under strong ownership by the authorities and the Sri Lankan people more broadly.
Addressing a virtual press conference yesterday, the Mission chief however said that the economic impact of the reforms on the poor and vulnerable needs to be mitigated with appropriate measures.
It is now essential to continue the reform momentum - IMF mission Chief
“In this regard, we welcome the authorities’ firm commitment to strengthen social safety nets, including through a minimum spending floor, well-targeted spending through a new Social Registry, and establishment of objective eligibility criteria. Tax reforms under the programme are designed to be progressive, that is, ensuring greater contributions from high-income earners. Efforts to increase tax revenues should be pursued in a growth-friendly manner while protecting the poor and most vulnerable,” Breuer added.
Sri Lanka is expected to receive the first tranche of the US $ 3 billion bailout amounting to about US $ 333 billion within a couple of days. IMF Mission Chief for Sri Lanka Masahiro Nozaki said the first tranche of the facility could also be used for government’s expenditure purposes in addition to strengthening the country’s foreign reserves.