The International Monetary Fund and Sri Lankan authorities have reached a staff-level agreement on economic policies to conclude the combined 5th and 6th reviews of the country’s reform programme under the Extended Fund Facility (EFF).
According to the IMF, Sri Lanka will gain access to approximately USD 700 million in financing once the agreement is approved by its Executive Board.
In a statement, the IMF noted that ongoing economic reforms have supported the country’s recovery, with stronger-than-expected growth, improved revenue collection, and a steady buildup of foreign reserves. Sri Lanka recorded a 5% year-on-year economic growth in 2025, while inflation rose to 2.2% in March 2026, and official reserves reached around USD 7 billion.
However, the IMF warned that Sri Lanka remains vulnerable to external shocks, particularly the Middle East conflict, which has driven up energy prices, disrupted tourism flows, and impacted Sri Lankan workers in the region. The country also faces recovery challenges following Cyclone Ditwah.
The agreement remains subject to IMF Executive Board approval and depends on key conditions, including maintaining cost-reflective fuel and electricity pricing while protecting vulnerable groups, as well as progress in debt restructuring and securing financing assurances from international partners.
Once approved, Sri Lanka would receive SDR 508 million (about USD 700 million), bringing total disbursements under the programme to approximately USD 2.4 billion.
The IMF emphasized that accelerating reforms is critical to maintaining macroeconomic stability, strengthening resilience to global uncertainties, and ensuring sustainable and inclusive growth. It also highlighted the importance of improving tax compliance, managing public finances prudently, safeguarding central bank independence, and strengthening governance and anti-corruption measures.
The IMF delegation, led by Mission Chief Evan Papageorgiou, held discussions with senior Sri Lankan officials, including Anura Kumara Dissanayake and Central Bank Governor P. Nandalal Weerasinghe, reaffirming continued support for Sri Lanka’s reform agenda during a period of global uncertainty.
