COLOMBO, April 9 (Xinhua) -- Sri Lanka and the International Monetary Fund (IMF) have reached a staff-level agreement on economic policies to complete the combined Fifth and Sixth Reviews under the country's Extended Fund Facility (EFF) program.
Approval by the IMF Executive Board will allow Sri Lanka to access about 700 million U.S. dollars, bringing total disbursements under the program to approximately 2.4 billion U.S. dollars out of the approved 3 billion U.S. dollars facility.
An IMF mission led by Evan Papageorgiou visited Sri Lanka from March 26 to April 9 to assess macroeconomic developments and progress on reforms. The agreement remains subject to Board approval and depends on restoring cost-recovery pricing for electricity and fuel while protecting vulnerable groups, as well as completing the financing assurances review linked to debt restructuring.
The IMF noted that Sri Lanka's economy grew by 5 percent in 2025, with inflation rising to 2.2 percent year on year in March 2026. Gross official reserves reached 7 billion U.S. dollars by the end of March, while fiscal performance was supported by tax revenue, including from motor vehicle imports.
Debt restructuring is nearing completion, with progress on bilateral agreements and the SriLankan Airlines debt exchange. However, risks remain, including exposure to the Middle East conflict, which has affected energy prices, tourism flows and remittances. Domestic pressures, such as post-cyclone reconstruction needs, also persist.
The IMF emphasized sustaining reforms through stronger revenue measures, prudent spending and improved public financial management. Maintaining central bank independence, rebuilding reserves and addressing financial sector vulnerabilities were also highlighted as priorities. ■
