May 02, 2010 (LBO) – Top Sri Lankan economists and a poll by an influential newspaper has backed the revival of a stalled International Monetary Fund deal to discipline government spending and preserve economic stability. A poll by Sri Lanka’s by the Business Times, a part of Sri Lanka’s The Sunday Times an influential English, weekly found overwhelming support for the government to continue with an IMF economic management deal.
The newspaper said 74 percent out of 300 respondents said the government should continue with the IMF deal while 12 percent each said no and were undecided.
Sri Lanka’s entered into a Stand-by Arrangement (SBA) with the IMF in May 2009 for emergency funding following a balance of payments crisis which started in late 2008, but the IMF held back its tranche after the government overshot its budget target for 2009.
Spending People’s Money
The deficit went up from a planned 7.0 percent of gross domestic product to 9.8 percent without grants and 10.3 percent with grant funding. Official data also showed that seven state enterprises had made additional losses of over one percent of GDP.
However during the program foreign reserves recovered from a low of around a