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Sri Lanka’s economic reform programme yielding first signs of recovery – IMF
The economic reform programme, implemented by the Sri Lankan authorities is yielding the first signs of recovery with positive real GDP growth in the third quarter of 2023, low inflation, increased revenue collection, and a build-up of external reserves, the IMF has said.
Staying the course on the reform agenda is necessary for this stabilization to evolve into broad-based and stable growth that will ensure a full and lasting economic recovery benefitting the people, the IMF has said.
Progress in meeting key commitments, under the IMF-supported programme, will be formally assessed in the context of the second review of the Extended Fund Facility (EFF) arrangement, alongside the forthcoming 2024 Article IV consultation assessing Sri Lanka’s economic health.
An International Monetary Fund (IMF) mission team, led by Mr. Peter Breuer, visited Sri Lanka from January 11 to 19, 2024, to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the EFF arrangement. At the end of the mission, Mr. Breuer issued the following statement:
“The economic reform programme, implemented by the Sri Lankan authorities, is yielding the first signs of recovery. Real GDP recorded positive growth of 1.6 percent year-on-year in the third quarter of 2023, the first expansion in six consecutive quarters. Shortages of essentials have eased, and inflation remains contained. Gross international reserves increased by USD 2.5 billion during 2023, and preliminary data point to improved fiscal revenue collections during the fourth quarter of 2023. However, challenges remain as these improvements need to translate into improved living conditions for Sri Lanka’s people.
“In this context, sustaining the reform momentum and ensuring timely implementation of all programmes commitments are critical to rebuilding confidence and putting the recovery on a firm footing that will benefit all people. Swift progress towards the introduction of a progressive property tax is key to ensuring fair burden sharing while sustaining the revenue-based consolidation. Tax policy measures need to be accompanied by strengthening tax administration, removing tax exemptions, and actively eliminating tax evasion to make the reforms more sustainable and to further build confidence among creditors to support Sri Lanka’s efforts to regain debt sustainability.
“Building on the Central Bank of Sri Lanka’s success in taming inflation, future monetary policy decisions should remain prudent with a focus on keeping inflation expectations well anchored. Against continued uncertainty, it remains important to continue rebuilding external buffers through strong reserve accumulation. Protecting the poor and the vulnerable through improved targeting and better coverage of cash transfers remains critical.
“To safeguard the stability of the financial sector and bolster its capacity to support economic growth, the authorities need to urgently finalize amendments to the Banking Act in line with their commitment under the IMF-supported program, implement the bank recapitalization plan and strengthen the financial supervision and crisis management framework.
“Following the publication of the IMF Governance Diagnostic report, it is now imperative for the authorities to adopt their own action plan for implementing the recommendations in the report beyond the priority commitments under the EFF arrangement. At the same time, ensuring an enabling environment for governance and transparency reforms to take place is key to bolstering public confidence and facilitating implementation of these important efforts.
“The authorities have made commendable progress with putting debt on a path towards sustainability. The execution of the domestic debt restructuring was an important milestone. A swift completion of final agreements with official creditors and reaching a resolution with external private creditors remain critical. Progress in meeting key commitments under the IMF-supported program will be formally assessed in the context of the second review of the EFF arrangement alongside the forthcoming 2024 Article IV consultation assessing Sri Lanka’s economic health.
“The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Central Bank of Sri Lanka (CBSL) Governor Dr. P. Nandalal Weerasinghe, Speaker Mr. Mahinda Yapa Abeywardana, Minister Mr. Kanchana Wijesekera, Minister Mr. Wijeyadasa Rajapakse,State Minister Mr. Shehan Semasinghe, Secretary to the Treasury Mr. K M Mahinda Siriwardana, Governor of Northern Province Mrs. P.S.M.Charles, Governor of Eastern Province Senthil Thondaman, and other senior government and CBSL officials. The IMF team also met with Parliamentarians, representatives from the private sector, civil society organizations, and development partners.
“We would like to thank the authorities for the excellent collaboration during the mission, including during the mission’s visit to the Northern and Eastern provinces. This visit enriched the mission team’s understanding of the challenges as well as the potential of Sri Lanka. We reaffirm our commitment to support Sri Lanka for a full economic recovery from the crisis.”
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President Commissions Offshore Patrol Vessel ‘Samudra Vijaya’ into Sri Lanka Navy
The commissioning ceremony of the deep-sea patrol vessel as Samudravijaya, gifted to the Sri Lanka Navy by the United States Coast Guard to enhance the Navy’s operational capabilities, was held under the patronage of Commander-in-Chief of the Armed Forces, President Anura Kumara Dissanayake, on Thursday afternoon (04) at the Eastern Terminal premises of the Port of Colombo.
The vessel was officially handed over to Sri Lanka by the United States Coast Guard on 2 December 2025. Following modifications to meet the operational requirements of the Sri Lanka Navy, the vessel commenced its voyage to Colombo on 20 February 2026 from the United States Coast Guard Yard in Baltimore, Maryland.
The induction of the vessel marks a significant step towards further strengthening the operational capabilities of the Sri Lanka Navy and enhancing the country’s maritime and national security. The vessel is expected to make an important contribution to maritime surveillance, search and rescue operations, protection of fisheries resources, environmental monitoring and the enforcement of international maritime laws and conventions. In particular, it will serve as a vital asset in combating narcotics trafficking and other transnational maritime crimes, which remain major challenges for both Sri Lanka and the wider region.
During the ceremony, President Dissanayake presented the official commissioning warrant to the vessel’s Commanding Officer, Captain Gayan Wickramasuriya. The President subsequently unveiled the vessel’s name board and official insignia before undertaking an inspection tour of the ship. The Commander of the Navy briefed those present on the vessel’s operational readiness, systems and capabilities.
President Dissanayake also signed the vessel’s Distinguished Visitors’ Book and was presented with a commemorative plaque featuring a replica of the vessel.
Among those present were Minister of Ports and Civil Aviation Anura Karunatilaka. Deputy Minister of Defence, Major General Aruna Jayasekara (Retd.), Secretary to the Ministry of Defence, Air Vice Marshal Sampath Thuyacontha (Retd.), Admiral of the Fleet Wasantha Karannagoda, Commander of the Army, Lieutenant General Lasantha Rodrigo, Commander of the Air Force, Air Vice Marshal Vasu Bandu Edirisinghe. Commander of the Navy, Vice Admiral Kanchana Banagoda, Inspector General of Police, Attorney-at-Law Priyantha Weerasooriya, Charge d’affaires to the U.S. Embassy Ms. Jayne Howell, Senior Defence Official and Defence Attache with Spouse Lieutenant Colonel Matthew House, representatives of the Embassy and senior officers of the Sri Lanka Navy.
(PMD)
News
Elders’ home devastated by fire was a ‘house of horror’: Witnesses
Death toll rises to 12: Director remanded
Some residents were allegedly chained
Police have come under public pressure to investigate allegations of inhumane treatmenf the residents at an elders’ home in Batagoda, which was also reportedly used as a care centre for persons with special needs, following a devastating fire that has so far claimed 12 lives.
Eyewitnesses who were among the first responders told the media that several residents had been chained inside rooms at the Senehase Kedella Elders’ Home when the fire broke out on Wednesday. They claimed that rescue efforts were hindered as iron chains could not be removed, and that some residents died while being restrained.
Authorities have not yet verified these claims, and Police said investigations are continuing.
Police spokesman ASP F.U. Wootler, contacted for comment, said there were rumours to that effect, but the Police were not in a position to verify the claims until a report from the Government Analyst was received. He said eight survivors with burn injuries were being treated in hospital.
Meanwhile, the Director of the facility had been arrested and was due to be produced before the Horana Magistrate’s Court, Police said adding that he was remanded till June 11.
The death toll from the fire has risen to 12 as of Thursday morning following the recovery of additional charred remains during ongoing forensic examinations at the site. Six others sustained serious injuries and are being treated at the Horana Base Hospital.
Police said 72 residents were inside the facility at the time of the blaze. Of them, 10 died inside the building, seven were injured and hospitalised, while 51 were rescued and relocated.
Survivors were initially housed at Batagoda Junior School before being transferred with Army assistance to another branch of the same care network in Galpatha.
A magisterial inquiry was conducted on Thursday morning. Horana Magistrate Lakmini Vidanagamage visited the scene. The burnt remains were examined and removed under judicial supervision.
Separately, allegations have emerged that residents were required to pay an admission fee of Rs. 75,000, along with a monthly charge of Rs. 35,000 to the centre. Police have not commented on these claims.
The director was taken to the scene as part of ongoing investigations, while forensic experts continue examinations to determine the cause of the fire, which remains undetermined.Anguruwatota Police are conducting investigations.
By Norman Palihawadane and Nishan S Priyantha
News
CERT : AI-generated videos depicting Prez, PM lure public into financial scams
Sri Lanka CERT has issued a public warning over the circulation of artificial intelligence (AI)-generated videos falsely depicting President Anura Kumara Dissanayake, Prime Minister Harini Amarasuriya and several other prominent personalities to promote fraudulent investment schemes online.
According to complaints received by the national cyber security agency, the videos have been created using deepfake technology and are being used as part of attempts to defraud members of the public through financial scams.
The images of famous sports personalities and other public figures have also been misused in the deceptive content.
The agency has warned that similar AI-generated material has been used to spread false information relating to investment opportunities, employment offers, as well as matters concerning the country’s economy and tax policies.
According to Sri Lanka CERT, the videos are being widely shared across online platforms and frequently contain links urging viewers to make investments in return for purported profits.The agency has cautioned that these links may redirect users to fraudulent websites designed to steal personal information, financial data and money from unsuspecting victims.
Sri Lanka CERT has urged the public to exercise extreme caution when encountering such content online and advised against clicking on suspicious links or sharing personal information through unverified websites.
“The public should remain vigilant and avoid becoming victims of false information and online fraud schemes,” the agency said.
Sri Lanka CERT has also encouraged internet users to verify information through official sources before acting on any investment, employment or financial offers circulated via social media or other online platforms.
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