IMF praises Sri Lanka’s economic progress ahead of fifth review

The International Monetary Fund (IMF) has recognized Sri Lanka’s continued economic progress as the country prepares for its fifth review under the IMF-supported Extended Fund Facility (EFF) arrangement.

Speaking at a press briefing yesterday (July 24), IMF Communications Director Julie Kozack gave an update on Sri Lanka’s economic program and upcoming evaluations.

On July 1st, the IMF Executive Board completed the fourth review of Sri Lanka’s program. Following this, a new tranche of $350 million was released, raising the total financial support to $1.74 billion.

Kozack said Sri Lanka’s “ambitious reform agenda continues to deliver commendable outcomes,” and pointed to major improvements in key economic areas. Inflation remains low, government revenue is increasing, and the country’s international reserves are growing.

She highlighted that “the post-crisis growth rebound to 5 percent in 2024 is quite remarkable.” She also noted that the revenue-to-GDP ratio improved from 8.2 percent in 2022 to 13.5 percent in 2024.

Kozack stated that Sri Lanka’s debt restructuring process is almost complete and described the country’s overall program performance as “generally strong.” She confirmed the government’s continued commitment to meeting the program’s goals.

Looking ahead, the fifth IMF review is expected to take place in the fall of 2025.

Although the economic outlook is positive, Kozack warned of ongoing risks, especially from global trade tensions and policy uncertainties.

“They will take that into account in discussions with the authorities on policies, and all of the program matters as part of the Fifth Review,” she said, explaining that the IMF team will closely evaluate these risks with Sri Lankan officials.