• The proposed Public Financial Management (PFM) Act is crucial for securing the disbursement of the third tranche of the IMF's $3 billion bailout package.
• In order to obtain executive board approval from the IMF, the PFM Act necessitates parliamentary approval after reaching a staff-level agreement.
• The PFM Act aims to reinforce fiscal discipline by introducing binding fiscal rules and is essential for meeting ambitious fiscal targets, notably a primary surplus target of 2.3 percent of GDP by 2025.

Former Central Bank Governor and economist Dr. Indrajit Coomaraswamy emphasized the critical role of the proposed Public Financial Management (PFM) Act in securing the disbursement of the third tranche of the International Monetary Fund's (IMF) $3 billion bailout package. Speaking at a webinar organized by the Liberal Youth Movement, Dr. Coomaraswamy highlighted that the PFM Act is a prerequisite for obtaining approval from the IMF's executive board. Although a staff-level agreement has been reached, parliamentary approval of the PFM Act is necessary. The draft legislation, aimed at reinforcing fiscal discipline through binding fiscal rules, is expected to be presented in parliament soon. Dr. Coomaraswamy stressed the significance of the PFM Act in achieving ambitious fiscal targets, notably a primary surplus target of 2.3 percent of GDP by 2025. This legislation, set to replace the current Fiscal Management (Responsibility) Act No. 3 of 2003, provides specific provisions for deviations from fiscal rules under extreme conditions and measures to restore fiscal compliance. The proposed PFM Act is slated to take effect alongside the 2025 budget, reflecting a concerted effort to enhance fiscal governance and meet IMF obligations.

IMF third tranche hinges on proposed PFM Act: Dr. Coomaraswamy | Daily Mirror