Reform efforts are bearing fruit with the economy starting to recover, inflation remaining low, revenue collection improving, and reserves continuing to accumulate. Performance under the program, the design of which benefitted from the 2021 Article IV recommendations, has been strong. Nevertheless, the economy is still vulnerable and the path to debt sustainability remains knife-edge. Sri Lanka faces considerable uncertainties associated with the upcoming presidential elections and ongoing debt restructuring. Sustaining the reform momentum is critical to safeguarding the hard-earned gains and ensuring Sri Lanka can emerge from one of its most severe economic crises.
- Format
- Paper
- Frequency
- regular
- ISBN
- 9798400279478
- ISSN
- 1934-7685
- Pages
- 159
- Published in
- United States of America
- Series
- Country Report No. 2024/161
- StockNumber
- 1LKAEA2024001
Table of Contents
- FOR IMMEDIATE RELEASE -1
- Sri Lanka - 2024 Article IV and Second Review of EFF - Staff Report for publication.pdf -1
- Policy Recommendations 8
- Acronyms 11
- CONTEXT 13
- RECENT MACROECONOMIC DEVELOPMENTS 13
- OUTLOOK AND RISKS 15
- Program Performance 16
- Policy Discussions 18
- A. Fiscal Policy 18
- Revenue Mobilization 19
- Expenditure Prioritization 21
- Public Financial Management 22
- B. Debt Sustainability 23
- C. Monetary and Exchange Rate Policies 24
- D. Financial Policies 27
- E. Anti-Corruption and Governance Reforms 28
- F. Inclusive and Growth-Enhancing Structural Reforms 30
- PROGRAM MODALITIES and Monitoring 32
- STAFF APPRAISAL 35
- Policy Initiatives 78
- CEB 81
- SLA 82
- RDA 82
- I. Context and Macroeconomic Developments 90
- II. Economic Program 91
- III. Advancing Revenue-Based Fiscal Consolidation and Reforms to Social Safety Nets, Fiscal Institutions, and SOEs 91
- IV. Restoring Public Debt Sustainability 100
- V. Restoring Price Stability and Rebuilding External Buffers 102
- VI. Ensuring Financial Stability 106
- VII. Reducing Corruption Vulnerabilities 109
- VIII. Advancing Growth-Enhancing Structural Reforms 112
- IX. Program Risks and Contingency Planning 113
- X. Program Monitoring and Safeguards 114
- I. performance criteria 126
- A. Performance Criterion on Central Government Primary Balance 126
- B. Performance Criterion on the Stock of Expenditure Arrears of the Central Government 127
- C. Performance Criterion on Central Government Tax Revenue 127
- D. Performance Criterion on Net Official International Reserves 127
- The Following Adjustment Will Apply: 129
- E. Performance Criterion on the CBSL’s Net Credit to the Government (NCG) 131
- The Following Adjustment Will Apply: 131
- II. Continuous Performance Criteria 131
- F. Performance Criterion on New External Payment Arrears of the Nonfinancial Public Sector and the CBSL 131
- G. Performance Criterion on New CBSL’s Purchases of Government Securities in the Primary Market 132
- The Following Adjustment Will Apply: 132
- H. Other Continuous Performance Criteria 132
- IV. Indicative Targets 133
- I. Indicative Target on Social Safety Net Spending 133
- V. Data Reporting Requirements 136
- AFTER BOARD - Sri Lanka - 2024 Article IV and Second Review - Informational Annex.pdf -1
- fund relations 150
- Safeguards Assessment: 151
- Exchange Rate Arrangement: 151
- Article IV Consultation: 152
- ROSC Assessments: 152
- FSAP and FSSR Participation: 152
- Governance Diagnostics: 152
- Capacity Development: 152
- Resident Representative 153
- relations with other international financial institutions 154
