The International Monetary Fund (IMF) said Sri Lanka’s economic prospects had improved markedly and it has indicated it will release the next tranche of a multi-billion dollar loan to Sri Lanka. Sri Lanka originally agreed a $
2.5 billion loan accord from the IMF in June last year.Following a two week mission to the country, the body gave an upbeat assessment of Sri Lanka's economy. It said government targets for deficit reduction were on track, with taxes increasing and spending being cut.
According to IMF sources Sri Lankan government will use the money to pay for post-war reconstruction following the end of fighting with the LTTE.The head of the Sri Lankan mission Brian Aitken has said they were in a position to recommend to the IMF board approval for the next loan instalment worth over $200m. Since the third trench of the loan was made available the IMF decided to grant the loan in equal instalments.The IMF said: "Overall economic conditions are improving, and the economy is likely to show strong growth this year."
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