Govt prioritises meeting IMF timelines, debt restructuring | Sunday Observer

Govt prioritises meeting IMF timelines, debt restructuring

18 June, 2023

The Government is working steadfastly to meet the timelines of the International Monetary Fund (IMF) as per its supported reforms program to maintain economic stability, State Minister of Finance Shehan Semasinghe told the Sunday Observer yesterday.

He said that maintaining macroeconomic stability will be crucial to enhance the effectiveness of the proposed measures to meet the desired economic goals.

The State Minister of Finance was responding to the Sunday Observer’s inquiry about the potential relaxation of vehicle imports by the Government following a request from Sri Lanka Customs’ officials to allow vehicle imports under a credit line system to increase Government revenue. The Customs officials had proposed this to the Sectoral Oversight Committee on National Economic and Physical Plans, chaired by former Minister Mahindananda Aluthgamage.

State Minister Semasinghe said, “The Government has prioritised debt restructuring consistent with the IMF reforms to restore macroeconomic stability and debt sustainability.”

He said relaxing vehicle import restrictions is certainly not on the cards at this critical juncture.

Foreign reserves are crucial to meet external obligations, he said. Conserving foreign reserves is necessary to manage currency stability. The Government would not take any action other than what would strengthen its negotiating position in debt restructuring, said Semasinghe.

“However, we have relaxed some import restrictions on about 4,000 items out of 6,000. They were done after seriously contemplating economic sequences and studying its fiscal implications in the broader economic context,” he said.

“Lifting import restrictions require careful coordination and sequencing with other policy measures. It is vital to ensure that structural reforms, institutional strengthening, and capacity-building initiatives are in place before facilitating even the gradual removal of vehicle imports,” he said.