Sri Lanka nears US$700 Million IMF payout after staff-level deal

The International Monetary Fund (IMF) has reached a staff-level agreement with Sri Lankan authorities on the combined fifth and sixth reviews of Sri Lanka’s Extended Fund Facility (EFF) programme, according to a statement issued today (April 9).

The IMF mission visited Sri Lanka from March 26 to April 9, 2026 and held discussions on the country’s economy and progress on reform policies.

The IMF said the agreement still needs approval from its Executive Board. It also depends on two main conditions: Sri Lanka restoring cost-recovery pricing for electricity and fuel while protecting vulnerable people, and the completion of a financing assurances review linked to debt restructuring.

If approved by the IMF Executive Board, Sri Lanka will be able to access about US$700 million. This would bring the total IMF support disbursed under the programme to about US$2.4 billion.

The IMF said Sri Lanka’s reform programme has shown positive results. The economy grew by 5 percent in 2025, inflation rose to 2.2 percent in March 2026, and official reserves reached US$7 billion by the end of March.

The statement also noted that Sri Lanka’s fiscal performance in 2025 was strong, helped mainly by taxes on motor vehicle imports. It said debt restructuring is close to completion, with progress made on bilateral agreements and the debt exchange involving SriLankan Airlines.

However, the IMF warned that Sri Lanka remains vulnerable to external shocks. It said the conflict in the Middle East has pushed up energy prices, disrupted an important travel hub for tourists, and affected Sri Lankans working in the region.

The IMF also said Sri Lanka must manage infrastructure and spending needs caused by Cyclone Ditwah. It warned that disaster risks, trade uncertainty, and global conflict could affect the country’s recovery.

The IMF said Sri Lanka should continue efforts to increase government revenue, improve tax collection, control spending carefully, and maintain proper pricing for fuel and electricity while supporting low-income groups.

It also stressed the need to protect poor and vulnerable communities, strengthen social safety nets, maintain central bank independence, rebuild foreign reserves, and safeguard financial stability.

The IMF welcomed the government’s 2026 action plan on governance reforms and said strong implementation will help support anti-corruption efforts and economic growth.

The IMF mission met President and Finance Minister Anura Kumara Dissanayake, Central Bank Governor Dr. P. Nandalal Weerasinghe, senior government officials, parliamentarians, private sector representatives, civil society groups, and development partners during the visit.

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