The Executive Board of the International Monetary Fund (IMF) said there was continued weakness in the structure of Sri Lanka’s public finances and cited “reasons for concern” as it concluded the Fourth Post-Program Monitoring.

In a press release on Wednesday the IMF said Sri Lanka’s “economic outlook remains uncertain, and will depend to a large extent on the course set for economic policies in the coming months”.

“Deterioration in the overall balance of payments, the loss of central bank foreign exchange reserves, the weak state of public finances, and growing public debt are reasons for concern,” said the statement.

“Despite continued access to international debt markets, these trends suggest that financial risks for Sri Lanka have increased,” it added. “To mitigate these risks, the authorities should take appropriate corrective actions to safeguard macroeconomic stability and lay the foundation for durable and inclusive growth. Improvements in the business climate, reform of state owned enterprises, and a more open trade regime are key to boosting competitiveness and growth.”

The IMF went on to call for “a comprehensive reform of tax policy and administration, and a prompt resumption of fiscal consolidation supported by increased revenues” to become “a key policy priority” for the Sri Lankan government.

Also see our earlier posts:

‘Is Sri Lanka’s Fiscal House in Order?’ – IMF mission chief (09 Dec 2015)

Sri Lanka’s exports continue to fall as tea tumbles by 20% (09 Dec 2015)