(LANKAPUVATH | COLOMBO) – To tackle the enormous economic challenge that Sri Lanka faces, everyone must come together to support the recovery and promote stable and inclusive growth, IMF Senior Mission Chief for Sri Lanka Peter Breuer said.
In a video, the IMF Senior Mission Chief for Sri Lanka said after years of increasing economic problems and policy mistakes Sri Lanka has committed to reform and rebuild.
The IMF has approved $ 3 billion fund facility over the next four years to support Sri Lanka at this time of need.
Breuer explained that since 2019, significant tax cuts and delays in anticipated reforms left the country entering the pandemic with thin country reserves and high debt levels and no fiscal space to buffer against shocks.
The mission chief said Sri Lankans must come together to support the government program to recover the country out of this crisis.
“There are no easy solutions. But that’s where everyone must come together to tackle this enormous problem. Sri Lankans must make efforts to continue on their way out of the crisis while supporting the less fortunate,” he says in the video.
The global community must support Sri Lanka in this effort so that it can once again be in a path of strong and inclusive growth, the IMF official emphasized.
Working with the fund, Sri Lankan authorities have put together an ambitious economic recovery program. It includes reforms to raise government revenue, stabilize prices, build up foreign reserves and safeguard financial stability. The Sri Lankan authorities are also asking their creditors to support their efforts by granting debt relief.
Pointing out that when a crisis strikes, the poor are hit the hardest, the IMF official noted that the program aims to raise spending for the poor and the vulnerable, strengthen social safety nets and introduce progressive tax reforms to ensure greater contributions come from high income earners.
“With breathing room from external debt relief, we expect the economy to gradually recover and expand. It’s critical to ensure the hard won gains from the reforms benefit the Sri Lankan people and the crisis will not repeat itself,” Mr. Breuer said.
The authorities have committed to improve public financial management and strengthen the anti-corruption legal framework. In addition the IMF will assess the governance and corruption vulnerabilities and provide recommendations
