COLOMBO: The International Monetary Fund said on Friday (Apr 11) that discussions with Sri Lanka will continue towards reaching an agreement in the near term on the fourth review of its US$2.9 billion program after a staff team visited the island nation.
Sri Lanka, which plunged into a financial crisis due to a record shortage of dollars three years ago, has posted a strong recovery after securing a bailout from the global lender in March 2023.
But this recovery could be affected by external shocks that are creating uncertainty for the Sri Lankan economy, the IMF said in a statement.
The US has imposed a 44 per cent tariff on imported goods from Sri Lanka, which will impact about US$3 billion of exports, mostly apparel. The tariff has been suspended for three months but Sri Lanka will still have to pay an additional 10 per cent on most exports to the US.
“More time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program,” the IMF statement added.
The need to increase power prices, avoid tax exemptions and rebuild foreign exchange reserves were also mentioned by the IMF as focus areas for Sri Lanka.
