COLOMBO, Oct. 20 (Xinhua) -- Sri Lanka has reached a staff-level agreement on the first review of the Extended Fund Facility (EFF) Arrangement with the International Monetary Fund (IMF), clearing the path for the country to access the next installment of funds from its 3 billion U.S. dollar bailout program, an IMF official said on Friday.
Sri Lanka will have access to about 330 million dollars in financing once the review is approved, IMF Senior Mission Chief for Sri Lanka Peter Breuer said during a virtual press briefing.
Sri Lankan authorities remain committed to the reform agenda under the EFF and their reform efforts have been commendable, including rapid disinflation and a significant fiscal adjustment expected by the end of this year, according to a statement issued earlier by Breuer and Deputy Mission Chief Katsiaryna Svirydzenka.
Inflation is down from a peak of 70 percent in September 2022 to 1.3 percent in September 2023, gross international reserves increased by 1.5 billion dollars during March-June this year, and shortages of essentials have eased, said the statement.
Despite these early signs of stabilization, full economic recovery is not yet assured, as growth momentum remains subdued, with real GDP in the second quarter contracting by 3.1 percent on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals, according to the IMF.
Sustaining the reform momentum is of paramount importance in steering the economy towards a sustained recovery and fostering stable, inclusive economic growth, said the IMF.
The IMF in March this year approved a 48-month extended arrangement under EFF of about 3 billion U.S. dollars to support Sri Lanka's economic policies and reforms. ■
