Mr. Breuer: Thank you, Randa. Good morning, all, thank you very much for being here and for your interest in Sri Lanka’s IMF-supported economic reform program.

I am pleased to announce that, on Friday February 28, the IMF Executive Board approved the third review under the 48-month Extended Fund Facility Arrangement with Sri Lanka. This provides the country with immediate access to about US$334 million to support its economic policies and reforms.

It brings the total IMF financial support dispersed so far to about $1.3 billion.
The IMF continues to support Sri Lanka’s efforts to restore and maintain macroeconomic stability and debt sustainability while protecting the poor and vulnerable rebuilding external buffers. Safeguarding financial sector stability and enhancing growth oriented structural reforms, including by strengthening governance.

The IMF Executive Board’s approval to complete the third review recognizes the strong program performance. All quantitative targets for end December 2024 were met, except for the indicative target on social spending.
Most structural benchmarks do by end January 2025 were either met or implemented with delay.

Turning to through the macroeconomic situation, it is encouraging to see that reforms in Sri Lanka are bearing fruit with the economic recovery gaining momentum, inflation remains slow.

Revenue collection is improving and reserves continue to accumulate.
Economic growth averaged 4.3% since growth resumed in the third quarter of 2023.
The recovery is expected to continue in two thousand 2025 now. Despite these positive developments, the economy is still vulnerable.
It is critical to sustain the reform momentum to ensure macroeconomic stability and debt sustainability.

And to promote long term inclusive growth, there is no room for policy errors.
Let me emphasize that sustained revenue mobilization is crucial to restoring fiscal sustainability.

And ensuring that the government can continue to provide essential services.
Boosting tax compliance and refraining from tax exemptions are key to maintaining support for economic reforms.

Let me also emphasize that to ease economic hardship and ensure the poor and vulnerable can participate in Sri Lanka’s recovery, it is important to meet social spending targets and continue with reforms of the social safety net going forward. Social support needs to be well targeted towards the.

Most disadvantaged, so as to promote inclusive growth with limited fiscal space.
Restoring cost recovery, electricity pricing without delay is needed to contain fiscal risks from state owned enterprises.
A smoother execution of capital spending within the fiscal envelope would foster medium term growth.

The recent successful completion of the bond exchange is a major milestone towards restoring debt sustainability, timely finalization of bilateral agreements with creditors in the official creditor committee, and with remaining creditors is a priority now. Regarding monetary policy, I would like to highlight that it should prioritize maintaining price. Stability supported by sustained commitment to prohibit monetary financing and.

To safeguard central bank independence. Continued exchange rate, flexibility and gradually phasing out the balance of payments measures remain critical to rebuild external buffers and facilitate rebalancing.

As for the financial sector, resolving non performing loans, strengthening governance and oversight of state owned banks and improving the insolvency and resolution frameworks are important priorities to revive credit growth and support the economic recovery.

Finally, prolonged structural challenges need to be addressed to unlock Sri Lanka’s long term potential, including steadfast implementation of governance reforms.
I would like to thank the authorities for their commitment and excellent collaboration.

Let me also take this opportunity to announce that as part of a standard staff rotation process, I will soon be transitioning from the role of mischief for Sri Lanka.
And I will be handing over to the next mission Chief Evan Papageorgiou, during the next mission. It has been an honor to accompany Sri Lanka on his journey out of this.

Severe crisis for nearly three years. While there are more challenges ahead, the IMF team will remain a steadfast partner for Sri Lanka and its people on the road to a more sustainable and inclusive recovery.
I will be moving to another assignment soon and wish the people of Sri Lanka continued success with the economic recovery.
With this, let me hand it back to Rhonda. Thank you.

https://www.imf.org/en/News/Articles/2025/03/05/tr-030525-sri-lanka-transcript-of-press-briefing-on-completion-of-3rd-rev-for-eff