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Message: <blockquote data-quote="lkdood" data-source="post: 7417463" data-attributes="member: 92282">The International Monetary Fund urged the Sri Lankan government on  Wednesday to speed up fiscal reforms and produce a more comprehensive  deficit cutting plan if wants to get a multi-billion dollar loan back on  track.           "The disbursement of the next tranche (of the loan) is linked  most importantly with the budget," Koshy Mathai, the IMF resident  representative for Sri Lanka, told Reuters in an interview.           "What we looking for is the budget and meaningful steps  towards reducing the deficit, and also doing it in an economically  sensible way, raising revenue in a sustainable way, introducing sensible  tax reforms and cutting inefficient expenditures."           Mathai said the IMF was not demanding immediate results today  or tomorrow but wanted to see a firm plan over the medium term.           The IMF in February delayed the release of a third tranche of  the $2.6 billion loan after the government overshot its 2009 budget  deficit target. The shortfall rose to an eight-year high of 9.7 percent,  according to the finance ministry, well above the original target of 7  percent.       The IMF had said it would disburse the next tranche if Sri Lanka  lays out concrete plans for fiscal consolidation in its budget after  the April elections. The loan was approved last July to help Colombo  avert a balance of payments crisis.           But the government said last week it would only introduce  fiscal reforms including tax changes in its 2011 budget, not this year's  as it had previously pledged.           Economists and analysts say the IMF loan is important in  maintaining investor confidence in the $40 billion economy as the  country works to recover from a 25-year civil war.           Mathai said Sri Lanka's fiscal position remained weak,  raising concerns about its economic stability in the medium term.           "This could bring pressure on inflation and the exchange  rate, crowd out investment and private sector credit, drive up interest  rates and lead to a reliance on volatile foreign borrowing," he said.           The government has said it will adopt a mini-budget for 2010  covering the rest of the year from mid-July. Since January, it has been  relying on an interim budget and a $3.9 billion spending plan authorised  by President Mahinda Rajapaksa.           Government officials said the mini-budget will have both  expenditure and revenue proposals.       An IMF mission is expected in Sri Lanka next week to discuss  with the government how to proceed with the loan programme if the budget  is further delayed, Mathai said.           "What we understand is that the mini-budget also may contain  tax reform proposals, even if some technical work remains and those  proposals are implemented only later," he said.<a href="http://in.reuters.com/article/southAsiaNews/idINIndia-48243420100505?sp=true" target="_blank"><img src="http://www.reuters.com/resources_v2/images/logo_footer.gif" alt="" class="fr-fic fr-dii fr-draggable " style="" /></a></blockquote>

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