Skip to content
Search

Latest Stories

IMF wants strong budget measures from Sri Lanka

Sri Lanka plunged into its worst financial crisis in seven decades last year after its foreign exchange reserves dwindled to record lows

IMF wants strong budget measures from Sri Lanka

THE International Monetary Fund (IMF) is looking for a strong budget and narrower deficit from Sri Lanka as it seeks funding to bridge the gap between government revenue and expenditure, the IMF mission chief for the country said last Friday (20).

Sri Lanka plunged into its worst financial crisis in seven decades last year after its foreign exchange reserves dwindled to record lows, but since locking down a $2.9 billion (£2.38bn) IMF programme in March it has managed to partly stabilise its economy, reducing runway inflation and rebuilding reserves.


However, the country has struggled to increase public revenue, with the IMF projecting a 15 per cent shortfall this year. An improved performance for next year is necessary for Sri Lanka to get past the first review of its programme with the global lender.

Sri Lanka reached a staff level agreement with the IMF late last Thursday (19) to release the second tranche of about $330 million (£271m), but still needs approval from the IMF management and executive board.

Regarding revenues, senior mission chief for Sri Lanka, Peter Breuer, said the objective is not to let a shortfall happen next year, and ensure revenue exceeding 12 per cent of GDP.

“Like, approximately 12 months ago, we are, of course, looking for a strong budget that can achieve that with, of course, the objective being that the gap between expenditure and revenues needs to be narrowed so that Sri Lanka can, once again, find creditors who are willing to finance the remaining gap,” Breuer told reporters at an online briefing from Washington DC.

The fund said negotiations between bilateral creditors, bondholders and Sri Lanka are ongoing, adding that further delay might worsen the economic outlook for the country, thereby reducing its capacity to repay. “We urge all official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided,” the IMF said.

Sri Lanka typically uses borrowings from state banks, taxes and government securities to fund its budget.

The power regulator approved an 18 per cent electricity tariff hike for households in the country with effect from Friday, part of efforts by Sri Lanka to improve revenue of its state-run power monopoly, the Ceylon Electricity Board.

Sri Lanka increased tariffs by 65 per cent in February before reducing them by 14 per cent in June.

The power tariff hike is expected to partly increase the island’s inflation from 1.3 per cent in September to about five per cent by December, analysts said. (Reuters)

More For You

Kolhapuri sandal sales surge in India post Prada controversy

Customers shop for 'Kolhapuri' sandals, an Indian ethnic footwear, at a store in New Delhi, India, June 27, 2025. REUTERS/Adnan Abidi

Kolhapuri sandal sales surge in India post Prada controversy

INDIAN footwear sellers and artisans are tapping into nationalist pride stoked by the Prada 'sandal scandal' in a bid to boost sales of ethnic slippers with history dating back to the 12th century, raising hopes of reviving a struggling craft.

Sales are surging over the past week for the 'Kolhapuri' sandals that have garnered global attention after Prada sparked a controversy by showcasing similar designs in Milan, without initially crediting the footwear's origins.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy grew 0.7 per cent in Q1 2025, fastest in a year

THE UK economy expanded at its fastest pace in a year during the first quarter of 2025, driven by a rise in home purchases ahead of a tax deadline and higher manufacturing output before the introduction of new US import tariffs.

Gross domestic product rose by 0.7 per cent in the January-to-March period, the Office for National Statistics (ONS) said, confirming its earlier estimate. This was the strongest quarterly growth since the first quarter of 2024.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Key issues in India, US trade talks

TRADE talks between India and the US have hit a roadblock over disagreements on duties for auto components, steel and farm goods, Indian government sources said to Reuters, dashing hopes of reaching an interim deal ahead of president Donald Trump's July 9 deadline to impose reciprocal tariffs.

Here are the key issues at play:

Keep ReadingShow less
Anil Agarwal

Vedanta Resources, which is based in the UK and owned by Indian billionaire Anil Agarwal, has been working on reducing its debt. (Photo credit: Getty Images)

Getty Images

Anil Agarwal’s Vedanta Resources signs £438 million refinancing deal

VEDANTA LTD said on Thursday that its parent company, Vedanta Resources, has signed a loan facility agreement worth up to £438 million with international banks to refinance existing debt.

The refinancing move, where old loans are replaced by new ones, often at better terms like lower interest rates, has led ratings agencies such as S&P Global Ratings and Moody's to upgrade their outlook on the company this year.

Keep ReadingShow less
Trump-Getty

Trump said that while deals are being made with some countries, others may face tariffs.

Getty Images

Trump says major trade deal with India may be finalised soon

US PRESIDENT Donald Trump on Friday said a "very big" trade deal could be finalised with India, suggesting significant movement in the ongoing negotiations between the two countries.

“We are having some great deals. We have one coming up, maybe with India. Very big one. Where we're going to open up India," Trump said at the “Big Beautiful Bill” event at the White House.

Keep ReadingShow less