INSUBCONTINENT EXCLUSIVE:
The International Monetary Fund (IMF) says Sri Lanka needs to implement a credible and coherent strategy covering both the near- and
medium-term to restore macroeconomic stability and debt sustainability.In its Staff Report for the 2021 Article IV Consultation with Sri
Lanka, the IMF recommended a comprehensive set of policies with specific measures.The IMF noted that reforms should focus on strengthening
VAT and income taxes through rate increases and base-broadening measures.Fiscal adjustment should be accompanied by energy pricing reforms
to reduce fiscal risks from loss-making public enterprises, the IMF said further, adding that institutions building reforms, such as
revamping the fiscal rule, would help ensure credibility of the strategy.The IMF also suggested that near-term monetary policy tightening is
needed to ensure that the recent breach of the inflation target band is only temporary
Ministry of Finance.It also recommended the gradual restoration of a market-determined and flexible exchange rate
This article first appeared/also appeared in https://adaderana.lk
