Merchandise trade deficit widened in September 2023 due to the combined impact of relatively low export earnings and high import expenditure, compared to September 2022. The cumulative trade deficit during January to September 2023 continued to remain significantly low. 

Workers’ remittances and earnings from tourism recorded significant improvements in September 2023, compared to the corresponding period of the previous year. 

Tourist arrivals recorded over one million during the nine months of ending September 2023.

Foreign investments in the government securities market recorded a lower net outflow during September 2023, compared to the previous months.

Gross Official Reserves amounted to US dollars 3.5 billion by end September 2023.

The Sri Lanka rupee exhibited some volatility against the US dollar during the month of September 2023.

FULL TEXT

IMF staff and the Sri Lankan authorities have reached a staff-level agreement on economic policies to conclude the first review of the 48-month EFF-supported program. Sri Lanka will have access to SDR 254 million (about US$330 million) in financing once the review is approved by IMF Management and IMF Executive Board.

Macroeconomic policy reforms are starting to bear fruit and the economy is showing tentative signs of stabilization. Sustaining the reform momentum and addressing governance weaknesses and corruption vulnerabilities are critical to put the economy on a path towards lasting recovery and stable and inclusive growth.

Completion of the review by the IMF’s Executive Board requires: (i) the implementation by the authorities of all prior actions; and (ii) the completion of financing assurances reviews.