IMF says Sri Lanka’s economy to grow 4.4% in 2018 but corruption must be combated

IMF says Sri Lanka’s economy to grow 4.4% in 2018 but corruption must be combated

Colombo, March 12 ( – Sri Lanka’s economy is projected to grow by 4.4 percent in 2018, the International Monetary Fund (IMF) said in its latest update but warned reforms including a fuel price rise earlier tabled for March, remain critical to strengthen debt repayment capacity, improve state enterprise performance and put the overall economy on a stronger footing, local media reports said Monday.

The IMF further said efforts to combat corruption should also be stepped up in the island country.

An IMF staff team led by Manuela Goretti visited Colombo last week to hold discussions for the 2018 Article IV consultation and advance the technical work on the fourth review of Sri Lanka’s economic reform program under the three-year Extended Fund Facility (EFF).

The team noted that following a series of weather-related shocks in 2017, Sri Lanka’s economy was gradually normalizing and real GDP growth was projected to rise to 4.4 percent in 2018, supported by a recovery in agriculture and industry and robust growth in services.

“Nevertheless, the economy remains vulnerable to adverse shocks given the still sizable public debt and low external buffers. Looking ahead, to secure these hard-won gains and support inclusive, sustained growth, the reform momentum needs to continue and policy frameworks and institutions further strengthened,” the IMF said.

The IMF further said that a robust implementation of the new Inland Revenue Act and the one-stop shop for Foreign Direct Investments will improve the investment climate.

During its visit, the IMF mission met with Prime Minister Wickremesinghe, senior Ministers, Governor of the Central Bank of Sri Lanka Coomaraswamy, other public officials, and representatives of the business community, civil society and international partners.