Sri Lanka : First Post-Program Monitoring Discussion.

Format:

Book

Government document

Author/Creator:

International Monetary Fund. Asia and Pacific Department.

Series:

IMF Staff Country Reports; Country Report ; No. 2014/289

IMF Staff Country Reports

Language:

English

Subjects (All):

Fiscal policy--Sri Lanka.

Fiscal policy.

Physical Description:

1 online resource (35 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2014.

Language Note:

English

Summary:

EXECUTIVE SUMMARY Context. Sri Lanka’s economy has navigated recent market turbulence relatively well. Growth has remained solid, inflation is in mid-single digits, and the current account deficit has narrowed. From mid-May, the exchange rate came under pressure as market expectations of U.S. Federal Reserve tapering shifted, but Sri Lanka’s experience was in line with that of other emerging markets. Since September, market pressures have eased. By some metrics, reserves remain on the low side, but were boosted in late-September by an external debt issue of a large state-owned bank. Monetary policy. Monetary policy has eased progressively since end-2012 as growth slowed, inflation fell, and private sector credit weakened. At the time of the mission, staff recommended keeping monetary policy on hold for the near term. However, policy rates were subsequently reduced, with the central bank citing continued low inflation and the opportunity to stimulate growth to a higher level in 2014. Fiscal policy. The authorities remain committed to fiscal consolidation and intend to meet their 2013 deficit target. However, the steady real decline in government revenue collection poses risks to needed medium-term fiscal consolidation. The 2014 budget offers an opportunity to address the steady slide in revenues, including by further expanding the tax base. External debt. Alongside Sri Lanka’s graduation to middle-income status has come a shift away from concessional, bilateral debt and towards external debt issuance on commercial terms by state owned and commercial banks. While this is a natural progression of financial development, it also raises risks. It is essential that the proceeds of such external borrowing are invested so as to enhance productivity, add to economic resilience, and generate the foreign exchange needed to service future obligations.

Contents:

Cover; CONTENTS; RECENT DEVELOPMENTS AND OUTLOOK; FIGURES; 1. Macroeconomic Developments; 2. Monetary and Exchange Rate Developments; POLICY DISCUSSIONS; A. Maintaining External Sustainability; 3. Performance Following Market Turbulence on Global Financial Markets; BOXES; 1. Refinancing Risks and Policy Options; B. Creating Fiscal Space; 2. Sri Lanka's Falling Tax Revenues; C. Monetary Policy; D. Financial Sector Policies; CAPACITY TO REPAY; STAFF APPRAISAL; 3. Sri Lanka-Gold Pawning Activity; TABLES; 1. Selected Economic Indicators, 2010-18

2. Summary of Central Government Operations, 2010-183. Monetary Accounts, 2010-18; 4. Balance of Payments, 2010-18; 5. Projected Payments to the Fund, 2013-18; 6. Financial Soundness Indicators-All Banks, 2008-13

Notes:

Description based upon print version of record.

Description based on online resource; title from PDF title page (ebrary, viewed October 17, 2014).

ISBN:

9781498345675

1498345670

9781484301036

148430103X

9781498311519

1498311512