Dr. Gita Gopinath, the First Deputy Managing Director (FDMD) of the International Monetary Fund (IMF), is set to visit Sri Lanka from June 15 to 16, 2025, marking a pivotal and symbolic moment in the country’s ongoing economic recovery. It will be the first visit by a sitting FDMD since 2005, signaling the IMF’s deepened commitment to Sri Lanka’s efforts to stabilize its economy and push forward with much-needed structural reforms.
A key event during her visit will be her role as guest of honour at the high-level policy conference titled “Sri Lanka’s Road to Recovery: Debt and Governance”, scheduled for June 16. Co-hosted by the Ministry of Finance, the Central Bank of Sri Lanka, and the IMF, the conference comes at the midpoint of the country’s IMF-supported reform programme. It will provide a platform to assess progress, reflect on the macroeconomic stabilization experience, and set the direction for governance and fiscal policy reforms in the months ahead.
Sri Lanka has been undergoing a challenging but comprehensive reform process since it declared its first-ever sovereign default in April 2022. The default, involving around USD 83 billion in external debt, came on the heels of a devastating economic collapse driven by depleted foreign reserves, soaring inflation, and critical shortages of essentials such as fuel, food, and medicine.
To support the recovery, the IMF approved a USD 2.9 billion bailout in March 2023 through its Extended Fund Facility (EFF). The programme includes regular quarterly reviews, with the third completed in November 2024, triggering a USD 333 million disbursement. In parallel, Sri Lanka secured a crucial bond-swap agreement with creditors, restructuring approximately USD 12.55 billion in external debt an arrangement expected to save the country around USD 9.5 billion over four years.
By the end of 2024, early signs of recovery had begun to emerge. The country registered modest GDP growth, foreign reserves increased by over USD 2.5 billion, and inflation dropped significantly. These improvements prompted Fitch Ratings to upgrade Sri Lanka’s credit rating from “restricted default” to “CCC+” in December 2024.
Still, the IMF has warned that maintaining reform momentum is vital. Among the Fund’s priority areas are strengthening tax collection, restructuring loss-making state-owned enterprises, and boosting fiscal transparency and accountability.
Although the immediate economic freefall may have slowed, Sri Lanka remains at a politically fragile stage. Public frustration with ongoing austerity measures and increased taxes could threaten the pace of reform. Dr. Gopinath’s visit is expected to reinforce the urgency of continuing reforms and the need for public trust and global investor confidence.
Her visit is widely seen as both a vote of confidence in the reform process and a stark reminder of the complex road that lies ahead. It could also set the tone for future IMF reviews and influence global investor sentiment at a time when Sri Lanka’s path forward remains under intense international scrutiny.
