IMF says ready to provide flexibility amid polls

Saturday, 15 June 2024 01:23 - - {{hitsCtrl.values.hits}}

IMF Senior Mission Chief for Sri Lanka Peter Breuer says organisation respects democratic process; willingness to adjust schedule to align with elections
Opines IMF open to alternative proposals post-election provided sticking to bailout deal benchmarks
States rebuilding Govt. revenues is critical program objective to help Sri Lanka emerge from crisis

The International Monetary Fund (IMF) yesterday reiterated its stance on supporting Sri Lanka through its economic recovery, while maintaining the necessary flexibility to accommodate the democratic process and potential changes in Government post-elections.

Addressing a virtual IMF press briefing following Sri Lanka’s second review of the Extended Fund Facility (EFF) program, IMF Senior Mission Chief for Sri Lanka Peter Breuer yesterday said that the organisation fully respects the democratic process and is willing to adapt its schedule to align with the elections.

“Elections may affect a little bit on the timing of our missions that we conduct to discuss compliance with the program and reforms going forward,” he said.

When asked if a new Government could adjust the program and reduce taxes post-elections, Breuer responded IMF was willing to listen to alternative proposals from political parties; provided that they stick with the benchmarks set in the bailout deal.

“Sri Lanka has made good progress in terms of getting the recovery going, but the country really is not out of the woods yet,” he said, reiterating that they are willing to listen to different views on how these program objectives can be reached.

“These (alterations) need to be realistic and achievable within the timeframe of the program,” he stressed.

He also noted the critical need to rebuild Government revenues, which had significantly contributed to the severe economic crisis in Sri Lanka. “Rebuilding these revenues is an important objective of the program to allow Sri Lanka to emerge from the crisis,” he explained.

He added that narrowing the gap between Government expenditures and revenues is essential to making the debt sustainable and financing manageable.

Breuer also mentioned that the ‘Public Financial Management’ legislation has been tabled in Parliament, which aims to strengthen the fiscal framework and enhance fiscal responsibility. This law will help ensure that Government funds are spent as intended.