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| Sunday, 7 September 2003 |
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IMF Rep expresses confidence about Lanka's economy by Pelham Juriansz Jeremy Carter, Senior Resident Representative of the International Monetary Fund (IMF) outlined IMF's plans for 2003 and expressed hope that Sri Lanka's economy will rebound, at a meeting with journalists at the Central Bank. Referring to the IMF mission led by Jehangir Aziz which visited the island late last month, Carter said they had met the President, Prime Minister and other State and private sector officials as well as representatives from civil society, trade unions and academics. The IMF Executive Board had approved a loan in seven equal proportions for Sri Lanka in April. It will be reviewed every six months and any changes taken into account. Despite the slowdown in world trade and economic growth, Sri Lanka's economy has rebounded strongly from the difficulties in the first half of 2003. Notably, economic expansion has broadened from being domestic demand-based to reflect a strong performance of exports and tourism. "The Government's target of 5.5 per cent growth in 2003 can be met," Carter said. Sri Lanka's external developments have been encouraging with improved exports, continued strong service receipts and foreign donor assistance all contributing to a strong accumulation of reserves by the Central Bank. Carter said: "The IMF team had talks focused on economic prospects and assessed policy intentions for the coming period in the context of the Government's economic reform programme, being financially supported by the Poverty Reduction and Growth Facility (PRGF) and the Extended Fund Facility (EEF) arrangements, approved by the IMF's Executive Board on April 18." "One of the plus points is that the accumulated interest rates have come down. On the fiscal side, the overall position looks quite good. The expenditure side has been rather well organised. The Value Added Tax in particular was having some implementation problems. Plantations are facing some hardships especially from the weather, but there are positive signs in the North and we have seen investment and rehabilitation programmes going on there. Overall fiscal discipline has been pretty good, and the Central Bank has done a good job in the last few months in streamlining and making monetary policies more efficient. But, we should try to get sustainable interest. "On the other hand, there have been efforts to improve governance. We should also look into enriching the private sector. The IMF mission will come back in October before the budget presentation to discuss the budget and the Executive Board is expected to complete the 2003 Article IV consultations and first review of the PRGF and EEF arrangements soon after the budget. At that point, the second disbursement of funds would take place," Carter explained. |
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