The International Monetary Fund (IMF) approved the release of sixth tranche of a $1.5 billion loan programme for Sri Lanka, while urging authorities to show fiscal discipline as the island nation heads into a presidential poll later this month.
The main candidates contesting the November 16 election have made campaign promises to voters including tax cuts.
Sri Lanka will receive $164 million from the sixth tranche, leaving $190 million still to be disbursed under the terms of the loan programme signed in June, 2016.
“Sustaining policy discipline remains critical to strengthen resilience and support strong and inclusive growth,” Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair of the IMF Board, said in a statement issued late on Friday.
“Mobilizing revenue will be central to place public debt on a downward path while preserving space for social and investment spending.”
It said sustained efforts to mobilize revenues will be needed next year to place public debt on a downward path, while preserving space for critical social and investment spending.
The global lender also said Sri Lanka's economy is gradually recovering from the impact of the Easter Sunday terrorist attacks, claimed by Islamist militants, that killed more than 250 people.
The IMF has already cut the growth projection for Sri Lanka to a near two-decade low of 2.7% this year and 3.5% next year.
