Potential outcomes of IMF recommendations

Policy recommendationPotential outcome
Increase tax revenue
Increase income tax rates, reduce income tax thresholds, increase VAT rate and  reduce VAT threshold
Strategy for debt sustainability
Setting up an independent debt office
Tightened monetary policy
Continuation of high interest rate
Flexible exchange rate regime
No fixed exchange rates
Reform SOEs
Listing minority stakes of some SOEs in the stock market, SOEs become more transparent, restructure Sri Lankan Airlines
Strengthen the Social Safety Net
Samurdhi becomes more targeted welfare
Reform price controls
Cost-based fuel pricing formula, Electricity pricing formula, electricity bill increase
Central bank independence
Repeal Monetary Law Act and pass the Central Bank bill to reduce political intervention in CBSL
Trade liberalization
Relaxing import restrictions