The International Monetary Fund (IMF) has stated that additional time is required to assess the full impact of global economic shocks on Sri Lanka’s recovery and its reform program supported under the Extended Fund Facility (EFF). This announcement followed the conclusion of a visit by an IMF delegation led by Senior Mission Chief Ivan Papagiorgiou, who was in Sri Lanka from April 3rd to 8th.
During their stay, the IMF team met with government officials to discuss the country’s ongoing progress in implementing economic and fiscal policies, as well as recent macroeconomic developments under the IMF-supported reform agenda. In a press release issued at the end of the mission, the delegation noted that external pressures and rising global uncertainty continue to affect Sri Lanka’s economic environment, which is still in the process of recovering from its worst financial crisis.
The IMF emphasized that due to the unpredictable nature of these global challenges—ranging from geopolitical instability to volatility in global markets—it will take more time to fully determine how they might influence the country’s economic outlook and the trajectory of its recovery program.
Despite these uncertainties, the IMF acknowledged the notable progress Sri Lanka has made in recent months. The country is projected to achieve 5% economic growth in 2024, a significant development considering the depths of the economic collapse it faced in 2022. The mission praised Sri Lanka’s recent deflation, with inflation falling to -2.6%, and the Central Bank’s successful accumulation of foreign reserves, which have reached 6.5 billion US dollars by the end of March 2025. The delegation also highlighted improvements in public finances, made possible through a series of fiscal reforms implemented as part of the broader restructuring plan.
The IMF concluded its visit by encouraging Sri Lanka to maintain its commitment to reforms while remaining prepared to navigate continued external challenges. Further technical evaluations will be conducted to assess the impact of global shocks on the reform framework and to ensure that the country’s economic progress remains on a sustainable path.
