Business

IMF Mission disagrees with widespread notion of ‘IMF-imposed fiscal consolidation for Sri Lanka’

Published

3 years ago

2023/05/25

Sahan Weerasooriya

Masahiro Nozaki and Peter Breuer

By Sanath Nanayakkare

The International Monetary Fund (IMF) mission led by Peter Breuer and Masahiro Nozaki that conducted a staff visit to Colombo from May 11 to 23, 2023 took issue with the widespread notion of ‘IMF-imposed fiscal consolidation measures for Sri Lanka’ at a Newsline TV programme hosted by Sirasa TV on Tuesday.

Disagreeing with a query on whether ‘IMF-imposed’ fiscal consolidation measures made matters worse for Sri Lanka, Peter Breuer said,” I take slight issue with your mention of IMF-imposed fiscal consolidation measures for Sri Lanka because what was the alternative if there weren’t an IMF programme for Sri Lanka and we intervened in the crisis at the request of the government of Sri Lanka,” he said.

“The IMF provides financing to support the government to reduce the amount of money it needs to find in the market which leads to even higher interest rates. Or it needs to get it from the Central Bank which leads to ever-increasing inflation which everyone is already feeling at their purse strings. Or it needs to reduce its expenditure and consolidate on the expenditure side. All three of these options are not desirable options for Sri Lanka. And by providing some financing, the IMF has cushioned the blow this crisis is dealing to Sri Lanka. And at the same time, the IMF programme commits the government to a credible set of reforms that help the country emerge from this crisis in a sustainable way,” he argued.

When a follow-up query was posed at him saying,” So wasn’t it really IMF-imposed.? Didn’t the IMF tell the government if you want our money this is what you have to do. You make the decision if you want to take it or leave it,” to which Peter Breuer replied,” We don’t approach negotiations like that. We engage in a dialogue with the authorities. We listen to the constraints they have because they know about the Sri Lankan economy that we don’t know about. And at such conversations, beneficial solutions emerge with the input of all sides, namely; the IMF, the government of Sri Lanka, other experts and stakeholders whom we consult throughout our missions in Sri Lanka who bring to the table different perspectives and different ideas that matter for the programme.”

Further speaking Peter Breuer said:

“Why is there consolidation in such terrible crisis? Essentially when you are out of buffers, you have no other choice. There is nothing you can turn to get out of the crisis. You have very few options because accessing the capital markets when debt is not sustainable is impossible. So in order to gain back the confidence of the markets to lend to you again and to bridge such a difficult situation you need to take that first step and start restoring fiscal balance,”

“It’s unfortunate that people will only lend to you when things are looking better except for the IMF that is here to help Sri Lanka in the rest of the times .”

Sarwat Jahan

” When things start getting better, when creditworthiness of the country improves, it should then be a lot easier to access markets again to avoid an overly tightening fiscal situation which has harmful impact on the population.”

“There are plenty of examples for successful IMF programmes where countries committed themselves to the reforms that were supported by the IMF. I myself was resident representative in Ireland when they faced a crisis. I recognize the fact that it’s a different economy. But Ireland committed to very strong reforms and was very serious about ownership and implementation. Those were really key parts of the reform programme in Ireland. They stuck to an ‘under promise- over deliver’ reform framework that generated positive surprises. That really helped Ireland regain confidence of the markets and of the people which resulted in progressive outcomes. There are plenty of other examples of successful IMF-supported programmes in the world,” he said.

When asked about the checks and balances of the programme in Sri Lanka, he said,” There are regular reviews that take place twice a year. First review is to take place around September /October 2023 when we come back and formally consult with the authorities, At that point we will see how things are going relative to what has been agreed and there will be another review six months later. We are in constant contact with the authorities. Our resident director’s daily life is about that. We have continuous video conferences with the authorities. And periodically we come for visits that are not tied to the formal reviews, but in a more informal way of catching up with the authorities. That is the purpose of our current visit in Sri Lanka,” he said.

Sarwat Jahan, Resident Representative in Colombo noted that the IMF was there to clarify on what the Fund can do, but more so what Sri Lankans as a nation can do to put the country back on its track.

“This crisis is quite deep. It is a combination of economic crisis and a humanitarian crisis. Sri Lanka had never faced debt sustainability issues before. This is the first time Sri Lanka has announced a moratorium on its debt service. So the situation is actually quite grave and it is going to take quite a bit of effort on all stakeholders to bring Sri Lanka back to its growth potential. So, for Sri Lanka as a whole the main part is to recognize how deep the crisis is and then all Sri Lankans need to contribute to the recovery which means taking ownership of the deep reforms that are needed. These reforms include tax reforms, SOE reforms and structural reforms – things that can help build entities and institutions. In addition to it, ensuring the independence of the Central Bank and dealing with anti-corruption issues will be important. So in my view, Sri Lanka has to take a holistic approach in meeting key commitments under the Fund-supported programme,” she noted.

All News Advertisement

Up Next

Saaraketha modernising agriculture through Agri Tech

Don't Miss

Sri Lanka Insurance awarded runner-up under the insurance category

Click to comment

Business

Financial literacy central to country’s development – CBSL Governor

Published

6 hours ago

2026/10/13

Sahan Weerasooriya

Dr. Nandalal Weerasinghe: ‘Financial literacy vital’.

By Hiran H. Senewiratne

Sri Lanka’s financial literacy rate is approximately 58 percent. Such literacy is absolutely necessary for the inclusion of people in the country’s financial system which in turn is central to overall economic development, Central Bank Governor Dr. Nandalal Weerasinghe said.

‘One needs to have knowledge and skills of a financial nature to figure in financial inclusiveness. While 86 percent of Sri Lanka’s population has access to the country’s financial system, 82 percent of the public has at least a savings account in the country’s banking system, Dr Weerasinghe said.

The Governor made these comments recently at the inauguration of Financial Literacy Month 2026 at the Central Bank’s Centre for Banking Studies, Rajagiriya.

Dr. Weerasinghe added: ‘Suitable, affordable and quality financial instruments are needed to enhance financial literacy in the country.

‘Financial information has to be accurate, risk-free and accountable, thus creating confidentiality in the financial system, which would enable the sector to reach greater heights’.

Meanwhile CBSL sources said: ‘The Literacy Month opened with the two-day ‘FinLit Expo Colombo’. The expo gives the public the opportunity to engage with institutions, better understand financial services, gain practical insights into managing their finances and learn how to protect themselves from financial fraud and scams.

‘The CBSL is leading the program in collaboration with stakeholder institutions. It forms part of the Financial Literacy Roadmap for Sri Lanka, which is implemented under the National Financial Inclusion Strategy (NFIS), the national framework for widening access to and use of formal financial services.

‘The Colombo event will be followed by six regional ‘FinLit Expos’ aimed at direct engagement with local communities. Partner institutions will also run awareness activities. Together, the events are intended to provide financial education to communities and encourage people to apply financial knowledge in everyday life.

‘A public awareness campaign on television, radio, newspapers and social media will extend the program’s reach. The program also includes digital financial literacy activities and the promotion of QR codes and other online payment methods.

‘The public and stakeholder institutions are encouraged to take part in the month’s activities under the theme, “Towards a Financially Literate Sri Lanka”.

Business

HUTCH strikes five awards as the only telco honoured at SLIM DIGIS 2.6

Published

6 hours ago

2026/10/13

Sahan Weerasooriya

HUTCH Sri Lanka strengthened its position as a leader in digital engagement by securing five accolades at SLIM Digis 2.6, emerging as one of the most recognized brands at this year’s digital excellence awards. The achievement was further highlighted by HUTCH being the only telecom operator to be recognized at the event.

Organized by the Sri Lanka Institute of Marketing (SLIM), SLIM Digis is Sri Lanka’s premier platform celebrating excellence, innovation, and outstanding achievements in the digital marketing industry. The recognition highlights HUTCH’s growing strength in digital-first, agile, and creative marketing, and its ability to respond to everyday moments, engage audiences, and deliver impactful digital campaigns.

The Gold Award for Best Use of Agile and Moment Marketing, a Silver for Best Use of Digital in a Marketing Campaign, and a Bronze for Best Performance Marketing were all awarded for “Keeping Sri Lanka Connected Through Ditwah,” HUTCH’s response to the cyclone that struck Sri Lanka in November 2025, recognised for the speed and relevance with which HUTCH kept customers better connected and informed.

HUTCH Roaming also earned two further Bronze awards for Best Use of Digital in a Marketing Campaign and Best Use of Creative Content. Bringing together AI-led storytelling, the campaign was designed around distinct customer clusters, each characterized by unique travel behaviours, needs, and perceptions, delivering relevant content for different audiences within a single overarching campaign.

“These wins are a strong reflection of how HUTCH approaches marketing today, staying close to the moments that matter to our customers and responding with speed, relevance, and creativity. Being the only telco recognised at SLIM DIGIS 2.6, and across five categories, is proof that agility and thoughtful storytelling can go hand in hand. This recognition reflects the collective efforts with our strategic partners, whose collaboration, expertise, and shared commitment brought great campaigns to life,” said Hamdhy Hassen, Chief Marketing Officer, HUTCH Sri Lanka.

Business

Fairway Colombo named Official Accommodation Partner of Manhunt International 2026

Published

6 hours ago

2026/10/13

Sahan Weerasooriya

(L-R): Gamunu Cooray, Ms. Tharushi Kulathunga, Avinga Wanigasekara, Arjuna Senanayake, and Jagath De Almeda at the signing ceremony held at Fairway Colombo.

Sri Lanka’s Smart Luxury Business Hotel to Host Delegates and Contestants from Over 40 Countries as the Island Nation Hosts Its First-Ever Global Pageant of This Scale

Fairway Colombo, a subsidiary of Fairway Holdings (Pvt) Ltd, has been appointed as the Official Accommodation Partner for Manhunt International 2026, one of the world’s most prestigious male pageants, scheduled to take place in Sri Lanka.

The event marks a historic milestone for Sri Lanka, as the country prepares to host a global pageant of this scale for the very first time. More than 40 contestants representing countries from across the world will arrive in Colombo, bringing together diverse cultures, international media attention, and a global audience — further strengthening Sri Lanka’s position as a premier destination for tourism, culture, and hospitality.

As the official accommodation partner, Fairway Colombo will welcome and host international delegates and contestants throughout their stay in Colombo, delivering the exceptional hospitality experience and personalized service that the hotel is recognized for.

A Landmark Partnership for Sri Lankan Tourism

“We are truly honored to be selected as the Official Accommodation Partner for Manhunt International 2026. This partnership is a proud moment not only for Fairway Colombo but also for Sri Lanka as a whole. Hosting an event of this global stature provides us with an opportunity to showcase our commitment to smart luxury, innovation, and authentic Sri Lankan hospitality to an international audience. We look forward to creating a memorable and seamless experience for all delegates and guests,” said Avinga Wanigasekara, General Manager of Fairway Colombo.

Strategically located in the heart of Colombo’s historic Fort district, Fairway Colombo is recognized as a Smart Luxury Business Hotel, combining modern comfort, advanced technology, and exceptional service. As part of Fairway Holdings (Pvt) Ltd, the property represents the group’s vision of delivering innovative, world-class experiences across the hospitality and leisure sectors.