Ceylon Chamber reiterates need to go to IMF without further delay

Thursday, 3 March 2022 05:03 - - {{hitsCtrl.values.hits}}

Calls on Govt. to engage with IMF to obtain technical advice to manage debt, boost reserves
Seeks urgent action to restore power crisis to avoid economic standstill
Points out that power and energy crises are all ramifications of the shortage of foreign exchange
Says proactive measures to resolve currency issue is the fastest way to tackle energy crisis in short term
Expresses concerns on tourism, export sectors drawback, overall economic growth slow down

The Ceylon Chamber of Commerce (CCC) yesterday expressed serious concerns on the adverse effects brought on its members and all sectors of the economy as a result of the ongoing interruptions to the supply of electricity coupled with frequent disruptions to the availability of fuel.

“The Chamber is of the view that these issues are all ramifications of the shortage of foreign exchange experienced by the country and believes urgently addressing the currency issue is the fastest way in which the power and energy issues can be tackled in the short term,” it said.

The CCC will also soon provide further recommendations on what other actions are needed specifically on power and energy sectors in the medium to long term in consultation with relevant experts.

As a first step in this direction, the CCC calls on the Government to commence a process of engagement with the International Monetary Fund (IMF) without any further delay to obtain their technical advice in managing the debt servicing as well as boosting foreign reserves.

“The Chamber hopes that this engagement should result in a debt sustainability analysis being carried out by the IMF, which could pave the way for a pre-emptive debt restructuring program,” it added.

It is the Chamber’s belief that a systematic and methodical approach to restructure debt with the support of the IMF will help the Government to successfully manage its external debt obligations, while ensuring the availability of much needed foreign exchange to support vital economic activity

“This could ensure the allocation of scarce foreign exchange reserves towards the purchase of essential supplies such as fuel for electricity generation, transport of goods and persons and other industrial purposes without holding it back for debt servicing,” it said

The Chamber is also concerned that the recovery seen recently in tourism and export sectors can be seriously hampered and economic growth slowed down unless urgent action is taken to eliminate the disruptions to the supply of electricity and fuel which is threatening to cripple all sectors of the economy.

The CCC on its own and together with other chambers, has, on numerous occasions, consistently advocated an engagement with the IMF since the outbreak of the COVID-19 pandemic in March 2020.

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