• Wednesday, May 29, 2024

Business

Cabinet approves new economic law to meet IMF targets

Transport Minister Bandula Gunawardana said the nation has seen its economy improve after a £2.29 billion bailout was approved by the IMF last April (Photo credit: @BandulaGunawar4)

By: Vibhuti Pathak

After the discussions with the International Monetary Fund (IMF) for the economic recovery, the cabinet has approved a new economic law ‘Economic Transformation Bill’ to meet the IMF’s needs. The law will cover key targets set by the IMF; the Cabinet Transport Minister Bandula Gunawardana informed the media on Tuesday (14).

The country faced an economic crisis after its foreign exchange reserves sank to record lows in 2022 pushing the country to default on its foreign debt.

But the nation has seen its economy improve after a £2.29 billion bailout was approved by the IMF last April and is expected to grow by 3 per cent this year.

The new Economic Transformation bill will legalise multiple targets set under the IMF programme, including a goal to reduce the debt to gross domestic product (GDP) ratio to 95 per cent by 2030, and reduce debt servicing costs to 4.5 per cent of GDP, the spokesperson said.

“This law is to ensure that Sri Lanka continues on this path to recover from the crisis and also implement larger reforms to grow consistently,” Gunawardana told reporters at the weekly Cabinet briefing.

Sri Lanka will hold its presidential elections before mid-October and opposition parties have said they could relook current government policies on taxation and IMF programme targets if they win.

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