COLOMBO
\nSri Lanka has reached a preliminary agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion, the global lendaer said on Thursday, as the country seeks a way out its worst economic crisis in decades.
\nThe agreement, which Reuters first reported on Wednesday, is subject to approval by IMF management and its executive board, and is contingent on Sri Lankan authorities following through with previously agreed measures.
\n\u201cThe staff level agreement is only the beginning of a long road for Sri Lanka,\u201d senior IMF official Peter Breuer told reporters in the commercial capital Colombo. \u201cAuthorities have already begun the reform process and it must continue with determination.\u201d
\nThe IMF requires receiving financing assurances from Sri Lanka\u2019s official creditors, besides ensuring efforts are made to reach a collaborative agreement with private creditors. \u201cDebt relief from Sri Lanka\u2019s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps,\u201d the IMF said in a statement.
\nThe IMF programme, spread over 48 months, will aim to raise government revenue to support fiscal consolidation, introduce new pricing for fuel and electricity, hike social spending, bolster central bank autonomy and rebuild depleted foreign reserves.
\n\u201cStarting from one of the lowest revenue levels in the world, the programme will implement major tax reforms. These reforms include making personal income tax more progressive and broadening the tax base for corporate income tax and VAT,\u201d the statement said.
\n\u201cThe programme aims to reach a primary surplus of 2.3 percent of GDP by 2024,\u201d it added.
\nUdeeshan Jonas, chief strategist at Sri Lankan investment bank CAL Group, said that the IMF\u2019s comments were largely positive.
\n\u201cThey said the revenue measures that we\u2019ve taken have been substantial (and) they\u2019re happy with what we\u2019ve done from a fiscal perspective,\u201d he said.
\nAnd although welfare budgets for Sri Lanka\u2019s poorest would be protected, Jonas said he expected significant austerity measures and job cuts at loss-making state-owned enterprises.
\n\u201cPrivatisation is on the cards,\u201d he said, \u201cand I think it will happen probably by next year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
COLOMBO Sri Lanka has reached a preliminary agreement with the International Monetary Fund (IMF) for a loan of about $2.9 billion, the global lendaer said on Thursday, as the country seeks a way out its worst economic crisis in decades. The agreement, which Reuters first reported on Wednesday, is subject to approval by IMF management […]<\/p>\n","protected":false},"author":2,"featured_media":278571,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[186],"class_list":{"0":"post-280978","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-imf"},"yoast_head":"\n