Sri Lanka is on track to complete its four-year IMF programme in the second half of 2027, Central Bank Governor Dr. Nandalal Weerasinghe said, signalling continued confidence in the country’s reform programme despite persistent global and domestic economic challenges.
Sri Lanka targets full IMF programme completion in the second half of 2027
The Governor said the next review under the Extended Fund Facility (EFF) arrangement is expected around November or December this year, with the country aiming to complete the review successfully before moving towards the final stage of the programme.
“The next review is somewhere in November, December and we are expecting that is also to be completed,” Dr. Weerasinghe told Bloomberg Television’s The Asia Trade programme.
He said Sri Lanka would then move into the final year of the four-year arrangement, with the programme expected to be fully completed during the second half of 2027.
The timeline represents an important milestone for the country, which entered the IMF programme after its worst economic crisis in decades. The programme has provided a framework for fiscal consolidation, monetary policy reforms, governance improvements and structural changes aimed at restoring macroeconomic stability and rebuilding investor confidence.
Sri Lanka entered the IMF programme in March 2023 after the IMF Executive Board approved a 48-month EFF arrangement of approximately US$3 billion. The facility was designed to support the Government’s economic policies and reforms while helping the country address its severe balance-of-payments pressures and restore debt sustainability.
Since then, the IMF programme has become a central component of the country’s economic stabilisation strategy. The reform process has included measures to strengthen government revenue, improve public financial management, restructure state-owned enterprises and establish a more sustainable framework for monetary and fiscal policy.
The programme has also progressed alongside Sri Lanka’s external debt restructuring efforts, which became necessary following the sovereign debt crisis that triggered the country’s 2022 economic collapse.
In May, the IMF Executive Board completed the combined fifth and sixth reviews of Sri Lanka’s EFF arrangement. The completion of the reviews provided access to approximately US$695 million, bringing total disbursements under the programme to around US$2 billion.
The latest disbursement strengthened Sri Lanka’s external financial position while providing further confirmation that the country had continued implementing key commitments under the programme.
Dr. Weerasinghe said implementation remained on track despite a challenging international environment and a succession of domestic and external shocks. The economy has faced pressures from energy prices, global geopolitical developments, inflation and changing international financial conditions during its recovery.
The Central Bank Governor’s confidence in completing the IMF programme is significant because the reform process is expected to continue even after the formal arrangement ends. Completing the programme would not mean an end to fiscal discipline or economic reforms, but rather a transition towards maintaining the institutional and policy improvements introduced during the four-year arrangement.
For Sri Lanka, maintaining reform momentum will be particularly important as the country seeks to rebuild its credibility in international financial markets. The economic crisis severely affected investor confidence and restricted access to international capital markets. Continued compliance with the IMF programme has therefore been an important signal to creditors and investors that the country is committed to sustainable economic management.
The upcoming review later this year will be another important test of that commitment. Successful completion would allow Sri Lanka to move closer to the final phase of the EFF arrangement while reinforcing confidence in the Government’s economic reform agenda.
The country is also attempting to balance the demands of fiscal consolidation with the need to support economic growth. After the sharp contraction associated with the crisis, economic activity has recovered, although policymakers remain cautious about external risks and inflationary pressures.
The Central Bank has indicated that growth could moderate during the second half of this year before returning towards the economy’s potential growth rate of around 5 percent from next year. Maintaining price stability while supporting sustainable growth will remain a key challenge as the IMF programme approaches its conclusion.
The successful completion of the arrangement in 2027 would mark a major turning point in Sri Lanka’s post-crisis recovery. However, the longer-term test will be whether the reforms introduced under the programme can produce stronger investment, higher productivity, improved public finances and sustainable economic growth beyond the IMF-supported period.
For policymakers, businesses and investors, the next 12 months will therefore remain closely watched. The November-December review, continued debt-restructuring progress and implementation of economic reforms will help determine whether Sri Lanka can maintain the stability achieved since the crisis and enter the post-IMF period on a stronger economic foundation.