Excerpts from Premier's Speech in the Parliament

*Excerpts from Premier's Speech in the Parliament Today*

_Debt Restructuring Plan and Debt Sustainability Analysis to be produced to the IMF in August. Extended Fund Facility will follow after that._

️ *Progress of the IMF EFF Discussions:* IMF staff-level discussions ended in a fruitful manner. Notable progress was made in June 2022. Next, Sri Lanka has to submit its debt restructuring plans and debt sustainability analysis plans to the IMF executive board. Sri Lanka's debt restructuring advisors; Lazard and Clifford Chance are currently in the process of preparing the plans. These will be submitted to the IMF in August 2022. The Premier is hopeful of reaching a staff-level agreement after that. Once the IMF executive board gives the nod, an Extended Fund Facility (EFF) will be given for four years. 

️ *A Donor Summit in the next few months:* Once an IMF agreement is arrived at, a donor summit will be organized with the help of Sri Lanka's all-weather friends like India, Japan and China. 

️ *GDP Growth Forecast:* The CBSL forecasts a negative 4-5% growth in 2022. The IMF forecasts a negative 6-7% growth. In 2023, GDP growth will be a negative 1%. In 2018, GDP stood at USD 94 billion, in 2022, GDP will come down to USD 76 billion (at the official exchange rate level). Sri Lanka is likely to reach the 2018 GDP level by 2026. 

️ *Primary account surplus by 2025:* The government plans to achieve a primary account surplus by 2025. _Primary account surplus = Tax revenue - Recurrent government expenditure (excludes interest paid on government debt)._

️ *Total external debt payable:* Sri Lanka has USD 28 billion external debt to settle. 

️ *Debt to GDP:* Debt to GDP is currently at 140%. This will be brought down to 95% by 2032. 

️ *Revenue to GDP:* Currently at 7.3%. The plan is to increase this to 14% by 2026. 

️ *Money Printing:* Monetary financing (money printing) to be limited/ceased by 2024.

️ *Inflation Expectations:* In 2022, the year-end headline inflation will be at 60%. Inflation will be brought down to 4-6% by 2025. 

️ *Financial System Stability:* State banks have faced a double whammy; with the slowdown in the economy and excessive SOE debt. Financial system stability needs to be restored. 

️ *Food Security:* Steps have been taken to increase the output in the upcoming Maha season. Fertilizer and other seeds etc will be provided. Provisions will be made in the interim budget. In the interim, global organizations like the World Food Programme will assist Sri Lanka. 

️ *Vulnerable Groups:* Social security benefits will be given to the vulnerable groups in society. 
 
Source: Parliament of Sri Lanka
https://youtu.be/l2bHFcC8DTo