MP De Silva on target on difficulty of IMF target

Fact Check

To check the MP’s claims, FactCheck.lk consulted the press release issued by the IMF and the 2021 Annual Report of the Central Bank of Sri Lanka (CBSL). The primary account balance is calculated as revenue minus expenditure excluding interest payments on debt. 

Gotabaya Rajapaksa’s tenure as president was between November 2019 and July 2022, covering the financial years 2020 and 2021. As a share of GDP, the primary account balance was negative 6% in 2021, as reported in the CBSL Annual Report 2021. The data is in line with the MP’s first claim on the primary account balance.   

According to the press release dated 1 September 2022, the IMF and Sri Lankan authorities reached a staff-level agreement to support Sri Lanka’s economic recovery under the Extended Fund Facility (EFF). The press release details that inter alia ‘the program aims to reach a primary surplus of 2.3% of GDP by 2025’, which is in line with the MP’s second claim on the target reached with the IMF.  

For the third claim, FactCheck.lk evaluated the target against the historical record and found that: (1) The primary balance since 1950 has been in surplus on only 5 occasions, and the highest surplus recorded is 2.8% of GDP in 1955. Since then, the primary account balance has never exceeded 0.6% of GDP, whereas the target set is 2.3% (see Exhibit 1).

(2) Achieving the primary balance target requires an increase of the primary account balance by 8.3 percentage points in a 4-year period, which has only been achieved once in the last 6 decades. In the 1979-1983 period, the primary balance increased by 10.7 percentage points.

These observations support the third claim that achieving the target would represent a monumental feat.

Since all three of the MP’s claims are consistent with the data available, we classify the MP’s statement as TRUE. 

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.

Exhibit 1: Historical record of Sri Lanka’s primary account balance as a share of GDP 

Source: CBSL Annual Report 2021, Special Statistical Appendix

Note: CBSL figures for 2019 and 2020 primary balance are erroneous and have therefore been corrected in the exhibit. Please refer to this previous factcheck (link) for more details.