The International Monetary Fund (IMF) is actively engaging with Sri Lanka’s new administration to discuss priorities as it works toward the next review of its Extended Fund Facility (EFF) program. This review aims to continue Sri Lanka’s economic recovery and reform initiatives.
A Sri Lankan delegation, led by the Central Bank Governor, Finance Ministry Secretary, and the President’s Economic Advisor Duminda Hulangamuwa, is currently participating in these talks. “Under the program, we have elements which address some of the priorities of the new government, including social protection,” said Krishna Srinivasan, Director of the IMF’s Asia Pacific Department, in Washington.
The third review of the 48-month bailout package, initially scheduled for September based on June’s economic data, was delayed due to Sri Lanka’s presidential election, which resulted in Anura Dissanayake’s election as the new president. Following this political transition, Srinivasan led an IMF delegation to Colombo, where discussions focused on preserving the progress made under the existing program.
With IMF assistance, Sri Lanka has reached an agreement with its official creditors and has an in-principle agreement with private creditors. The next step will be to formalize agreements with all creditors. “That’s a big step forward,” noted Srinivasan, adding that further reforms are necessary for Sri Lanka to achieve a sustainable economic recovery.
Sri Lanka has shown positive growth over the past year, rebounding from the crisis it faced in 2022. However, the recovery remains uneven, and vulnerable groups continue to be impacted by economic challenges. The IMF program aims to address these disparities and support stronger, inclusive growth.