By The Pulseline News Desk
Opposition MP Harsha de Silva has said the Government will need to reach an understanding with the International Monetary Fund (IMF) on its fiscal framework before it can present the upcoming Budget, as discussions between Colombo and the Fund continue over the country’s medium-term fiscal plans.
De Silva has said the absence of a staff-level agreement following the latest IMF discussions was, in his view, connected to ongoing negotiations over the Government’s medium-term fiscal framework, which includes the Budget proposals.
“The IMF has to agree with the basic framework of this Budget. Without an understanding with the IMF, they cannot present this Budget. That is the reality,” he has said.
His comments come as the Government prepares its next Budget amid the continuing implementation of Sri Lanka’s IMF-supported reform programme, with fiscal policy remaining a central component of the programme.
De Silva has said he could not say whether a staff-level agreement would be reached immediately or within the coming weeks, but has maintained that the two sides would ultimately have to reach agreement on the Government’s fiscal plans.
“The discussions will not be over until there is agreement on President and Finance Minister Anura Kumara Dissanayake’s Budget,” he has said.
However, the Opposition MP has stressed that reaching an understanding with the IMF should not be interpreted as the Government being required to accept every proposal made by the Fund.
“There is no need to dance to every tune of the IMF,” De Silva has said, arguing that the Government should have the capacity to negotiate and defend its own policy choices.
“We were among those who first said Sri Lanka should go to the IMF, but that does not mean everything the IMF says must be accepted. You must have the ability to argue your position,” he has said.
His remarks point to the balance the Government faces as it prepares the Budget: maintaining the fiscal discipline required under the IMF programme while retaining sufficient policy space to determine its own spending and revenue priorities.
According to De Silva, individual measures could still be negotiated between the Government and the IMF. However, he has maintained that such negotiations would have to take place within the broader fiscal framework agreed under Sri Lanka’s IMF programme.
The latest discussions between the Government and the IMF have therefore placed the forthcoming Budget at the centre of the continuing negotiations, with the eventual outcome expected to determine how far the Government can pursue its spending priorities while remaining within the programme’s fiscal commitments.
For the Government, the challenge is not simply securing IMF support for individual Budget proposals but reconciling its domestic policy priorities with the broader fiscal targets and reform commitments underpinning the IMF programme.
Leave a comment