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Sri Lanka’s economy recovering from the impact of Easter attacks, says IMF

IMF projected Sri Lanka’s growth to hit 3.5 per cent next year from this year’s forecast of 2.7 per cent,  compared to 3.2 per cent in 2018.

SNS | New Delhi |

Sri Lanka’s economy was slowly recovering from the impact of the Sunday Easter bombings that killed hundreds and crippled the booming tourism sector, the International Monetary Fund said on Saturday.

IMF projected Sri Lanka’s growth to hit 3.5 per cent next year from this year’s forecast of 2.7 per cent,  compared to 3.2 per cent in 2018.

There is an estimate by country to lose about 1.5 billion in tourism revenue this year as the result of a sharp dip in arrivals following the jihadist attacks on churches and hotels, killing around 269 people.

“The authorities are taking actions to mitigate the revenue shortfalls caused by the terrorist attacks and preserve the hard-won gains made under the program,” said IMF Deputy Managing Director Mitsuhiro Furusawa in a statement.

Furusawa’s comments coincided with the latest tranche of a 1.5 billion IMF bailout package for Sri Lanka first approved in 2016.

The IMF deputy managing director further warned that Sri Lanka need to maintain fiscal discipline in order to rein in public debt, while acknowledging the need for urgent social and investment spending.

The Presidential polls in Sri Lanka is scheduled on November 16 and the parliamentary elections next year, raising fears of welfare spending at the cost of a budget black hole.

As per the official figures, the country has to repay an amount of 5.9 billion in foreign loans this year.