President, IMF team agree to continue EFF programme without any changes

The team from the International Monetary Fund (IMF) which arrived last week on a fact-finding mission has indicated that there would be no changes to the agreement relating to the Extended Fund Facility programme being implemented with Sri Lanka during a meeting with President Anura Kumara Dissanayake.

A meeting between IMF representatives, who arrived in Sri Lanka to assess the damage caused by Cyclone Ditwah, and President Anura Kumara Dissanayake was today (28) at the Presidential Secretariat.

The IMF delegation, which arrived in the country on 22 January, travelled across the island to observe first-hand the damage caused by Cyclone Ditwah and met with communities affected by its impact.

The representatives expressed their regret over the disaster, which occurred at a time when Sri Lanka’s economy was gradually recovering, and over the severe hardships faced by the people as a result.

However, they commended the government’s swift actions to provide relief to affected communities, develop infrastructure and restore normalcy to people’s lives while confronting the challenges posed by the disaster, according to the President’s Media Division (PMD). The IMF team had also pointed out that the strong fiscal discipline maintained by the Sri Lankan government over the past year had been a key factor in addressing the challenge. They noted that the government’s ability to present a supplementary estimate of Rs. 500 billion was made possible by a surplus in the Treasury, describing this as a highly commendable development.

Emphasising that Sri Lanka is currently moving in the right economic direction despite facing a severe disaster situation, the IMF representatives stated that there would be no changes to the agreement relating to the Extended Fund Facility programme being implemented with Sri Lanka. They further indicated that discussions relating to the release of the sixth tranche under the programme would resume in March, the PMD stated.

President Anura Kumara Dissanayake noted that the disaster had most severely affected poor rural communities, with rural infrastructure and livelihoods suffering extensive damage. He stated that, accordingly, Rs. 500 billion had been allocated to protect rural livelihoods and restore income-generating activities.

The President further emphasised that this measure does not in any way signify a departure from proper financial management or fiscal responsibility.

He stated that the government’s objective is to ensure that the gains reflected in macroeconomic indicators genuinely reach ordinary citizens and that priority is being given to rebuilding the lives of people who have endured prolonged hardship due to events such as the Easter Sunday attacks and the recent economic collapse. The President added that all future Government programmes have been planned in line with this direction and that Sri Lanka expects the continued support of the International Monetary Fund in this regard.

Both parties also agreed to continue implementing the Extended Fund Facility programme without making any changes to the existing agreement, the PMD noted.
Representing the Government of Sri Lanka at the meeting were Minister of Labour and Deputy Minister of Economic Development Dr. Anil Jayantha Fernando, Secretary to the Ministry of Finance Dr. Harshana Suriyapperuma, Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe, Senior Economic Adviser to the President Duminda Hulangamuwa, along with several other officials.

Representing the International Monetary Fund were Director of the Asia and Pacific Department Krishna Srinivasan, Deputy Director for Asia and the Pacific Sanjaya Panth, Mission Chief Evan Papageorgiou, and Resident Representative Martha Woldemichael, among others.