Aug 23, 2010 (LBO) – An International Monetary Fund (IMF) mission to Sri Lanka said the island’s programme with the fund is on track with the government being able to meet the budget deficit target of eight percent of Gross Domestic Product. “End-June performance criteria on domestic budget borrowing, reserve money, and net reserves have been met.
“With budget revenues increasing and expenditure restraint continuing, fiscal performance so far remains consistent with achieving the government’s full-year deficit target of 8 percent of GDP. Financial sector reforms continue to go forward in line with the program.”
Aitken said the next disbursement is likely to be in late September or October.
About a billion dollars of the 2.5 billion dollar IMF loan have been disbursed to the Sri Lankan government so far, he said.
The IMF statement said the central bank’s recent rate cut was “appropriate” and that there was no sign of inflationary presssure.
The statement said: Overall economic conditions are improving as expected in the last visit, and the economy is likely to show strong growth this year.
“External balances are strong, remittance inflows continue at a high rate, tourism prospects continue to improve