News
New IMF funds for Sri Lanka may be delayed as review sees revenue shortfall
The International Monetary Fund did not reach a staff-level agreement with Sri Lanka in its first review under a $2.9bn bailout package, due to a potential shortfall in government revenue generation, Al Jazeera has reported, quoting the lender.
Speaking after a two-week visit to the country, IMF delegation head Peter Breuer on Wednesday said a second tranche of about $330m under a lending programme would only be released after the IMF reaches a staff-level agreement, and there was no fixed timeline on when that would take place, Al Jazeera has said.
“Sri Lanka has made commendable progress in implementing difficult but much-needed reforms. These efforts are bearing fruit as the economy is showing tentative signs of stabilisation,” the IMF said in a statement.
“The team will continue its discussions in the context of the First Review with the goal of reaching a staff-level agreement in the near term.”
The IMF delegation said despite early signs of stabilisation, full economic recovery is not yet assured and growth momentum remains subdued.
In the last six months, Sri Lanka has seen its runaway inflation drop to 1.3 percent in September, its currency appreciate by about 12 percent and foreign exchange reserves improve.
But the island has struggled to improve its revenue with additional measures likely to be taken in the upcoming budget in mid-November.
Despite revenue mobilisation having improved relative to last year, the IMF said revenue was expected to fall short of initial projections by nearly 15 percent by year end.
“While partially due to economic factors, the onus of fiscal adjustment would fall on public expenditure if there were no efforts to recoup this shortfall. This could weaken the government’s ability to provide essential public services and undermine the path to debt sustainability,” said the statement.
Sri Lanka’s international bonds were unmoved by the news, trading slightly higher on Wednesday. The bonds are still in deeply distressed territory, trading between 46-48 cents to the dollar, Tradeweb data showed.
The global lender said Sri Lanka would need to strengthen tax administration, remove tax exemptions, and actively eliminate tax evasion to increase revenues and signal better governance.
Sri Lanka accepted offers to exchange about $10bn worth of defaulted local debt for new bonds, taking it a step towards meeting debt restructuring requirements ahead of the IMF review.
Sri Lanka has also held multiple rounds of talks with bondholders and bilateral creditors including Japan, China, and India to reach an agreement to rework its foreign debt after suspending repayments in May last year.
Latest News
Landslide early warnings issued to the Districts of Colombo, Gampaha, Kalutara, Kegalle, Nuwara Eliya and Ratnapura
The National Building Research Institute [NBRI] has issued Landslide Early Warnings to the Districts of Colombo, Gampaha, Kalutara, Kegalle, Nuwara Eliya and Ratnapura valid upto 0900 AM on 23rd May 2026.
Accordingly,
LEVEL I [RED] landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Deraniyagala, Ruwanwella and Dehiowita in the Kegalle district and Ratnapura, Ayagama, Kuruwita and Eheliyagoda in the Ratnapura district.
LEVEL II [AMBER] landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Seethawaka and Padukka in the Colombo district, Attanagalla in the Gampaha district, Horana, Bulathsinhala, Ingiriya and Palindanuwara in the Kalutara district, Yatiyanthota in the Kegalle district and Pelmadulla, Kiriella, Elapatha, Kalawana and Nivithigala in the Rathnapura district.
LEVEL I [YELLOW] landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Mirigama and Divulapitiya in the Gampaha district, Agalawatta and Mathugama in the Kalutara district, Bulathkohupitiya in the Kegalle district and Ambagamuwa in the Nuwara Eliya district.
Latest News
Minor flood situation likely to occur within the next few hours in the low-lying floodplain areas of the Kalu River
Based on the heavy rainfall currently being received in the Kalu River Basin and the analysis of water level data recorded at hydrological gauging stations maintained by the Irrigation Department within the Kalu River Basin, it is hereby warned that a Minor Flood Situation is likely to occur within the next
few hours in the low-lying floodplain areas of the Kalu River.
The affected areas include the Divisional Secretariat Divisions of Ratnapura, Kuruwita, Ayagama, Elapatha, Kiriella in Ratnapura District.
The public residing in these areas, as well as motorists and passengers travelling through the affected regions, are strongly requested to act with utmost vigilance and to take all necessary
precautions. Disaster Management Authorities are requested to take necessary actions in this regard.
A considerable rainfall has occurred in the catchment areas of the Aththanagalu Oya Basin as atb5.00 AM today (22).
By analyzing the current rainfall situation and river water levels of Hydrological Stations on the Aththanagalu Oya, there is a possibility of a flood situation occuring in some low lying
areas of the Aththanagalu Oya and Uruwal Oya valleys situated in Diwulapitiya, Mirigama, Attanagalla, Mahara, Gampaha, Minuwangoda, Ja-ela, Katana and Wattala Div8sional Secretaries Divisions within next 48 hours.
Owing to this situation, there is a possibility of some of the roads running through these lowlying areas being inundated at some places.
The public residing in these areas, as well as motorists traveling through these regions, are requested to exercise extreme caution regarding this situation.
Tennessee execution called off after failed lethal injection
Landslide early warnings issued to the Districts of Colombo, Gampaha, Kalutara, Kegalle, Nuwara Eliya and Ratnapura
Minor flood situation likely to occur within the next few hours in the low-lying floodplain areas of the Kalu River
Flood warning issued to low lying areas of the Aththanagalu Oya and Uruwal Oya valleys
Flood warning issued to low lying areas of the Kelani River valley
Landslide early warnings issued to the Districts of Gampaha, Kalutara and Ratnapura
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
#SundayIsland 17th December – Headlines
Sunday Island – 28th March
Sunday Island Headlines – 21 March
Sunday Island – 21st February – Headlines
-
Features5 days agoSri Lankan Airlines Airbus Scandal and the Death of Kapila Chandrasena and my Brother Rajeewa
-
News6 days agoLanka’s eligibility to draw next IMF tranche of USD 700 mn hinges on ‘restoration of cost-recovery pricing for electricity and fuel’
-
News5 days agoKapila Chandrasena case: GN phone records under court scrutiny
-
News5 days agoRupee slide rekindles 2022 crisis fears as inflation risks mount
-
Features2 days agoOctopus, Leech, and Snake: How Sri Lanka’s banks feast while the nation starves
-
Business5 days agoExpansion of PayPal services in Sri Lanka officially announced
-
News1 day agoSteps underway to safeguard Sri Lanka’s maritime heritage
-
News5 days agoCourt orders further arrests in alleged USD 42 Mn NDB fraud case