Ceylon Chamber welcomes completion of IMF’s first review; stresses need for growth enhancing reforms

Friday, 15 December 2023 00:36 - - {{hitsCtrl.values.hits}}

The Ceylon Chamber of Commerce yesterday said it welcomes the Board approval of the International Monetary Fund’s (IMF) completion of its first review under the 48-month Extended Fund Facility (EFF) with Sri Lanka.

“This milestone, granting Sri Lanka access to approximately $ 337 million, underscores the nation’s commitment to fulfilling key performance criteria and benchmarks,” Ceylon Chamber said in a statement.

“Notably, this includes the release of the Governance Diagnostic Report and initiating debt restructuring agreements with key international creditors. These steps signify Sri Lanka’s robust commitment to reform, particularly in revenue-based fiscal consolidation, bank recapitalisation, and enhanced financial supervision, aligning with efforts to restore debt sustainability, rebuild reserves, reduce inflation, and ensure financial stability. The Government’s dedication to improving governance and safeguarding the vulnerable sectors of society is also commendable,” the Ceylon Chamber said.

Acknowledging these achievements as highlighted by the IMF, the Ceylon Chamber emphasised the need to continue this reform momentum. Despite the advancements made, unchanged business sentiment since late 2023 reflects subdued confidence primarily due to persistent challenges, underscoring the imperative for continual reform, particularly in fostering growth. In light of recent increases in taxation, which has contributed to inflation and impacted people’s purchasing power, the Chamber underscored the necessity of economic growth to improve these aspects.

The Ceylon Chamber said it advocates prioritising sectors such as tourism, ports and logistics, renewable energy, and exports and emphasises the importance of digitalisation of revenue authorities and other government agencies, as well as the introduction of advanced technology in the agricultural sector. The digital initiatives aligned with the IMF’s guidelines are crucial for enhancing fiscal efficiency, transparency, and governance.

The Ceylon Chamber of Commerce said it remains committed to collaborating with both the government and international partners such as the IMF in supporting these initiatives, aiming to foster a resilient and thriving Sri Lanka.