IMF said Sri Lanka has shown strong improvement in fiscal performance and the current favorable environment gives an opportunity to address the remaining macroeconomic challenges.

Directors of the International Monetary Foundation said Sri Lanka has shown strong improvement in fiscal performance and the current favorable environment offers a window of opportunity to address remaining macroeconomic challenges. In an statement issued recently following the conclusion of the Article IV consultation with Sri Lanka by the Executive Board of IMF last month, the executive directors commended the authorities for their satisfactory program performance, which has helped stabilize the economy and improve Sri Lanka's near-term growth prospects.

The Board added that continued fiscal adjustment, a more efficient capital market, and an improved business environment are needed to build a strong foundation for private sector-led growth.  

The Board recommended to implement well-sequenced tax reform measures that would create fiscal space for social spending and for much needed reconstruction and infrastructure investment. Directors stressed that the 2011 budget would be a key step in embarking on a credible reform strategy, aimed at broadening the tax base, simplifying the tax and tariff systems, and improving tax administration.

The IMF commended the Central Bank for bringing inflation under control and endorsed the Bank's current monetary policy stance.

source - www.slbc.lk