The International Monetary Fund (IMF) has emphasized the urgent need for Sri Lanka to implement reforms to tackle the economic challenges arising from newly imposed U.S. tariffs.
Speaking at a virtual press conference, IMF Mission Chief for Sri Lanka, Evan Papageorgiou, said Sri Lankan authorities are dedicated to meeting the goals of the IMF program and will take corrective actions if there are any deviations. He noted that the IMF recognizes Sri Lanka’s strong commitment to fulfilling its reform agenda.
This statement followed the staff-level agreement reached on 25th of April between IMF staff and Sri Lankan authorities to conclude the Fourth Review of Sri Lanka’s reform program under the Extended Fund Facility.
The Fourth Review evaluated the country’s economic progress, reviewed program targets, and set the path for future reforms. However, it came shortly after a major trade policy development — the U.S. imposed a 44% tariff on Sri Lankan exports on 2nd of April .
Papageorgiou noted that this move will significantly impact key sectors such as apparel and rubber, which are major contributors to Sri Lanka’s exports to the U.S. The apparel industry alone employs over 320,000 workers, making the impact substantial.
He stressed the need for ongoing reforms and encouraged efforts to diversify markets and enhance the global appeal of Sri Lankan exports to cushion the effects of such external shocks.
