The International Monetary Fund (IMF) and the Government of Sri Lanka have reached a staff-level agreement on economic policies to conclude the Fifth Review of Sri Lanka’s reform program under the Extended Fund Facility (EFF).
Once the review is approved by the IMF Executive Board, Sri Lanka will gain access to approximately US$347 million in financing.
According to the IMF, Sri Lanka’s economic reforms have continued to support recovery, with inflation reaching target levels, foreign reserves increasing, and GDP growth and revenue performance exceeding expectations. The IMF described the program’s performance as “strong,” emphasizing that continued reforms are essential to maintain stability and strengthen the economy against global uncertainties.
An IMF mission led by Evan Papageorgiou visited Sri Lanka from September 24 to October 9, 2025, to assess recent economic progress and policy implementation. The agreement remains subject to IMF Executive Board approval, pending the Parliamentary approval of the 2026 Appropriation Bill and the completion of financing assurances regarding debt restructuring and partner contributions.
If approved, this will bring total IMF support disbursed under the four-year, US$3 billion EFF program to US$2.04 billion.
The IMF noted that Sri Lanka’s economy grew by 4.8% in the first half of 2025, inflation remains contained, and gross reserves reached US$6.1 billion by the end of September. Fiscal performance was strong, bolstered by tax revenues from motor vehicle imports, while debt restructuring is nearing completion.
The IMF urged authorities to maintain prudent fiscal management, continue energy pricing reforms, strengthen state-owned enterprise (SOE) governance, and enhance social protection programs to safeguard vulnerable groups.
The mission also highlighted the importance of accelerating debt agreements, maintaining Central Bank independence, and advancing anti-corruption and governance reforms, including digitalization of tax systems and strengthening the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).
During the mission, the IMF team held discussions with President and Finance Minister Anura Kumara Dissanayake, Prime Minister Dr. Harini Amarasuriya, Central Bank Governor Dr. P. Nandalal Weerasinghe, senior officials, and representatives from the private sector and civil society.
The IMF reaffirmed its commitment to supporting Sri Lanka’s efforts toward sustained growth, debt sustainability, and economic resilience.
