Sri Lanka budget will maintain economic stability: IMF

June 29, 2010 (LBO) – Sri Lanka’s latest budget should ensure the island maintains macro-economic stability that would help accelerate economic growth, the International Monetary Fund representative in the island said. The key element is in ensuring macro-economic conditions remain stable, said Koshy Mathai.

“Inflation, interest rates and the exchange rate must remain stable to create the environment for growth, investment and creation of employment.”

He said the IMF was pleased with the government’s 2010 budget presented to parliament Tuesday with the deficit reduced to eight percent of gross domestic products from 9.9 percent last year.

“It is critical to make sure the fiscal balance is kept under control,” Mathai said.

Mathai said the IMF board had completed their second and third reviews of the program with Sri Lanka and made two disbursements and extended the programme to take into account the government’s medium-term growth strategy.

“This means the disbursement of 408 million dollars coming either today or tomorrow,” he said.

“We have a fundamentally optimistic view on Sri Lanka’s economic prospects. For 30 years the country has grown at five percent (annually) despite