Monday Dec 23, 2024
Monday Dec 23, 2024
Thursday, 7 December 2023 02:54 - - {{hitsCtrl.values.hits}}
Cabinet Co-Spokesman and Minister Bandula Gunawardena yesterday said, Sri Lanka is poised to receive approval from the International Monetary Fund (IMF) for the second tranche of the $ 2.9 billion Extended Fund Facility (EFF) next week.
“State Minister of Finance Shehan Semasinghe has informed that Sri Lanka will receive its second tranche at the next IMF Board meeting scheduled for 12 December. He (Semasinghe) believes funds can be transferred on the same day,” Gunawardena said in response to a query posed at the post-Cabinet meeting media briefing yesterday.
He said the IMF Executive Board was scheduled to meet yesterday (6) for the first review of Sri Lanka’s EFF arrangement. However, the next meeting is on 12 December.
The pending IMF approval marks a crucial step in the country’s ongoing financial recovery efforts. Sri Lanka is expecting around $ 330 million as the second tranche of the $ 2.9 billion 4-year bailout. In March, the Government received the first tranche to support economic policies and reforms.
At the conclusion of the IMF staff mission to Colombo from 14 to 27 September to discuss economic and financial policies to support the approval of the first review of the programme under EFF, highlighted the significant gap between Government expenditures and revenue collection remains a concern, and that reforms in tax policies and administration are critical to bridging it.
Noting that Sri Lanka has received favourable responses from China, India, Japan and France, Gunawardena said: “Hopefully we will get assurances from all creditors soon.”
He acknowledged that effective January, there would be an additional financial burden on the public due to the rise in Value added taxes (VAT) from 15% to 18%.
“There is no other option but to increase the revenue via taxes till we reach a surplus in the primary account. It is not just for the current administration, but any succeeding Government may have to adhere till 2027. Sri Lanka has entered into an agreement with the IMF and we are obliged to adhere to the terms and conditions to win over international confidence up until we fully overcome the bankruptcy status,” he added.
