Sri Lanka: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka

Volume/Issue: Volume 2022 Issue 091

Publication date: March 2022

ISBN: 9798400206498

$0.00

Add to Cart by clicking price of the language and format you'd like to purchase

Available Languages and Formats


English

Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Economics- Macroeconomics , Money and Monetary Policy , Public Finance , Business and Economics - Statistics , International - Economics , government intervention , Sri Lankan authorities , CBSL Monetary Law Act , government financing , liability positions vis-à-vis nonresident , COVID-19 , Fiscal consolidation , Global

Also of interest

Grenada

Peru

Nepal

Republic of Congo : 2001 Article IV

Summary

COVID-19 severely hit the economy, causing a loss of tourism receipts and necessitating several strict lockdowns. Pre-pandemic tax cuts and the impact of COVID-19 led to fiscal deficits larger than 10 percent of GDP in 2020 and 2021 and a rapid increase in public debt to 119 percent of GDP in 2021. Sri Lanka’s access to international capital markets was lost in 2020, prompting a decline of international reserves to critically low levels and large-scale direct lending to the government by the Central Bank of Sri Lanka (CBSL). External debt repayments and a widening current account deficit have led to foreign exchange (FX) shortages, while the official exchange rate has been de facto fixed since April 2021. Inflation is on the rise, reaching double digits in December 2021, reflecting imported inflation, supply shocks, and a pickup in domestic demand amid loose monetary policy.