Sri Lanka Surpasses IMF Targets for March 2024

Sri Lanka Exceeds IMF Targets Ahead of 2024 Review
ECONOMYNEXT – June 15, 2024: Sri Lanka has surpassed key quantitative targets set in its IMF program for March 2024, according to a preliminary report by the Washington-based agency. These targets, although not performance criteria for reviews, indicate the progress of the program and serve as a foundation for the upcoming September review based on June data.
Key achievements include:

• The primary balance, which is the overall deficit minus interest costs, reached 316 billion rupees, far exceeding the 70 billion rupee target.
• Central government tax revenue hit 837 billion rupees, surpassing the 750 billion rupee floor.
• Central bank credit to the government was reduced to 2,691 billion rupees, better than the target of 2,800 billion rupees.
• Net international reserves improved to a negative 1,268 million USD, exceeding the target of a negative 2,035 million USD.
• The central bank met its 5 percent 12-month inflation target, achieving 4.3 percent.
• The economy grew by 5.3 percent despite the reserve collection efforts.
  Sri Lanka’s Treasury has managed to keep current spending in check, aside from the rising interest bill. The central bank has also facilitated the appreciation of the exchange rate, which has helped reduce prices of traded goods and bolster savings.
  However, the report also highlights potential issues with the central bank’s monetary policy, which included injecting overnight and term money into banks and leaving excess liquidity from dollar purchases unsterilized, potentially creating future external instability.
  Overall, the preliminary data shows significant progress in stabilizing Sri Lanka’s economy ahead of the critical September 2024 review.