Sri Lanka economic revival better than expected: IMF

Sept 22, 2009 (LBO) – Sri Lanka’s economic revival is better than originally expected when the International Monetary Fund approved a stand by loan, and tax revenues are improving, a review mission said in Colombo. The IMF was originally expecting 3.0 percent growth for the island for 2009 but has revised it up to 3.5 percent.

“Things are on the upside. The Sri Lankan economy is definitely showing signs of bottoming out,” IMF mission chief Brian Aitken said.

“We expect some strength in exports and a rise in imports to reflect a higher demand. Remittances have been very strong. We have a positive outlook – a cautiously positive outlook”

Sri Lanka has met the key foreign reserve target in the program defined as net international reserves, and a budget target of 7.0 percent gross domestic product remained “ambitious” though revenue is picking up, he said.

The target is expressed in the program by limiting domestic borrowing.

Aitken said a 500 million US dollar Euro bond scheduled for next month was a positive development.

A smaller deficit and foreign borrowings reduce the need for borrowing from local markets, allowing the private sector to use savings of the people to generate