The Internati-onal Monetary Fund on Thursday approved Sri Lanka's sixth tranche of a $2.6 billion loan as expected, but urged more financial reform and commitment to executing changes that improve its weak fiscal position. The global lender also forecast the Indian Ocean island nation's $50 billion economy to grow by 7 percent in 2011, lower than the 8.5 percent the central bank has predicted. The central bank estimates 2010 growth at 8 percent.
The IMF cleared the $216.6 million tranche despite Sri Lanka missing the 2010 budget deficit target, the second year in a row it has not narrowed the gap far enough. The release brings the total disbursement to $1.5 billion.
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