Sri Lanka has received a fresh disbursement of USD 695 million from the International Monetary Fund (IMF) following the successful completion of the fifth and sixth reviews of its economic reform programme, Deputy Finance Minister Anil Jayantha Fernando announced.
The IMF Executive Board approved the reviews during its meeting on May 27, bringing the total financial assistance disbursed to Sri Lanka under the programme to approximately USD 2.4 billion.
In a statement issued after approving the latest tranche, the IMF said Sri Lanka’s performance under the reform programme remained generally strong despite facing both global and domestic challenges, including the conflict in the Middle East and the impact of Cyclone Ditwah.
According to the IMF, Sri Lanka met all quantitative performance targets set for the end of December 2025, while most structural reform benchmarks were either completed on time or implemented with delays. The Fund also confirmed that prior actions aimed at restoring cost-recovery pricing for fuel and electricity had been fulfilled.
Looking ahead, the IMF projects Sri Lanka’s economic growth to moderate to 3 percent in 2026, compared to 5 percent in 2025, largely due to global economic uncertainty and higher oil prices driven by tensions in the Middle East.
Inflation is forecast to rise to 5 percent next year, while the country’s current account balance is expected to move back into deficit.
The IMF noted that limited fiscal easing in 2026 was appropriate to address economic shocks and support recovery efforts following Cyclone Ditwah. However, it stressed the importance of returning to fiscal consolidation targets from 2027 onward to maintain economic stability and debt sustainability.
