The economic reforms implemented by the Sri Lankan authorities have continued to support the recovery, with inflation progressing to target, reserves accumulating, and real gross domestic product (GDP) growth and revenue mobilisation outperforming expectations. Performance under the programme has been strong, IMF said in a press release.
It further stated that advancing reforms is key to ensuring macroeconomic stability, anchoring the recovery, and equipping Sri Lanka to better withstand external shocks amid an uncertain global environment.
An IMF mission team led by Evan Papageorgiou visited Sri Lanka from September 24 to October 9, 2025, to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the Extended Fund Facility (EFF) arrangement. Papageorgiou confirmed that the staff-level agreement, under the four-year EFF approved in March 2023 for $3 billion, remains contingent on Parliamentary approval of the 2026 Appropriation Bill and a financing assurances review.
“Upon completion of the Executive Board review, Sri Lanka would have access to SDR 254 million (~$347 million), bringing the total IMF financial support disbursed under the arrangement to SDR 1,524 million (~$2.04 billion),” said Papageorgiou.
He praised the country’s robust recovery, noting 4.8 per cent GDP growth in the first half of 2025, 1.5 per cent inflation in September, and reserves reaching $6.1 billion. Debt restructuring is reported to be nearing completion.
The IMF emphasised that sustaining reform momentum is crucial for maintaining fiscal stability, improving tax compliance, and safeguarding public finances. Key priorities include enhancing public financial management, maintaining cost-recovery energy pricing, and strengthening governance of state-owned enterprises. Protecting vulnerable populations and advancing welfare reforms also remain central to the IMF’s recommendations.
On monetary policy, the IMF urged the Central Bank to remain data-driven and independent while continuing reserve accumulation and exchange rate flexibility. It also highlighted the need to finalise bilateral debt agreements swiftly and operationalise the Public Debt Management Office to restore investor confidence.
The mission team met with President and Finance Minister Anura Kumara Dissanayake, Prime Minister Dr Harini Amarasuriya, senior ministers, the Central Bank Governor, and other top officials, as well as representatives from the private sector and civil society.
ALCHEMPro News Desk (SG)
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