The Senior Operations Head for Sri Lanka at the International Monetary Fund, Mr Peter Brewer, emphasized that the IMF is prepared to engage with the incoming political party following the next election if they propose realistic changes to the aid program benefiting Sri Lanka. Speaking at a press conference, Mr. Brewer underscored the IMF’s respect for Sri Lanka’s democratic process, affirming their openness to all viewpoints that align with practical and achievable goals within the program’s timeframe.
Addressing Sri Lanka’s tax policy, Mr Brewer highlighted its critical role in national revenue, noting a decline from 20 per cent of GDP in the 1980s to 8 per cent in 2022. He emphasized that maintaining current tax policies is crucial, linking recent economic challenges to insufficient government revenue. The IMF, he stated, is closely monitoring this issue with concern.
Comparing Sri Lanka’s government income unfavourably with other emerging and middle-income countries (26 per cent versus Sri Lanka’s 9.3 per cent of GDP), Mr. Brewer stressed the importance of increasing government revenue to foster economic recovery.
Regarding the upcoming elections, Mr. Brewer acknowledged potential impacts on IMF operations, particularly in implementing reforms and adhering to aid program timelines.
Mr. Brewer clarified the IMF’s stance on debt restructuring, emphasizing equal treatment of all official creditors. He highlighted the IMF’s primary concern: whether Sri Lanka meets its debt restructuring objectives.
He concluded by noting Sri Lanka’s progress in debt restructuring, anticipating Memorandums of Understanding with China and other bilateral creditors shortly.
