“The fiscal situation constitutes Sri Lanka’s single biggest macro financial vulnerability and should be addressed expeditiously,” warned the IMF in its April 2015 report which was released in December.

The 67 page report added that there were further concerns that Sri Lanka’s GDP had itself been bloated and that country’s actual revenue was much higher than it claimed.

Economynext reports that analysts have said that for Sri Lanka to go forward, the false belief that people as a whole will somehow be better off with higher state spending or greater taxation must end. Adding that budget deficits backed by printed money only generate boom bust cycles and current collapse which harm the poor the most.

Sri Lanka’s prime minister recently called on the IMF to consider a “stand-by” agreement to support Sri Lanka in times of economic uncertainty.

(tamilguardian.com)