Dr. Krishna Srinivasan, Director of the International Monetary Fund’s Asia and Pacific Department, outlined the key pillars of the IMF-supported programme for Sri Lanka and reviewed its progress during an interaction with journalists in Colombo on Wednesday (28).
He said the programme is built on five main pillars, beginning with revenue-based fiscal consolidation alongside institutional fiscal reforms and strengthened social safety nets. Srinivasan noted that the programme includes a minimum spending floor for social protection, requiring the government to allocate at least a set amount while allowing additional spending to support vulnerable groups.
The second pillar focuses on restoring debt sustainability through fiscal consolidation and debt restructuring, while the third aims to restore price stability and rebuild external buffers such as foreign reserves.
The fourth pillar is designed to safeguard financial stability, and the fifth seeks to improve governance and reduce corruption.
Srinivasan described Sri Lanka’s performance under the programme as “pretty gratifying” and “pretty satisfying” in many respects. He said economic growth has rebounded strongly from the depths of the crisis, reaching 5 per cent last year.
He noted that tax revenue as a share of GDP has more than doubled, rising from 7.3 per cent at the peak of the crisis to 14.8 per cent today, anchoring the country’s fiscal consolidation efforts.
Inflation has also improved significantly, falling from around 70 per cent during the crisis to between 2 and 3 per cent at present, with expectations that it will move toward the Central Bank’s 5 per cent target.
Overall, Srinivasan said the programme has delivered progress in areas such as growth, price stability, rebuilding external buffers, and improving governance, while reducing corruption, though he cautioned that substantial work still remains to fully address the country’s challenges.
