Sri Lanka Passes Its Third IMF Evaluation with Strong Reform Progress
The International Monetary Fund (IMF) has approved Sri Lanka’s third review under the Extended Fund Facility (EFF), releasing $334 million to support continued recovery efforts. This confirms that Sri Lanka is meeting key reform targets across economic, financial, and governance sectors.
Why This Approval Matters
The IMF’s review process assesses whether Sri Lanka is:
- Meeting fiscal targets
- Managing debt sustainability
- Implementing monetary policy discipline
- Progressing on revenue and tax reforms
- Strengthening governance and transparency
Passing this review ensures that future funding and international support remain active.
Reforms Recognised by IMF
According to IMF analysts, Sri Lanka has made progress in:
- Cutting large budget deficits
- Stabilizing inflation
- Improving tax collection efficiency
- Reforming the energy and fuel pricing system
- Reducing losses of state-owned enterprises
The IMF still encourages faster restructuring of unprofitable SOEs and continued anti-corruption measures.
How This Tranche Helps the Country
The newly released $334M will help:
- Strengthen reserves
- Support essential imports
- Stabilize currency
- Improve market confidence
Analysts say this installment sends a positive message to global markets, creditor nations, and investors looking for stability.
Sri Lanka Still Has a Long Road Ahead
While the IMF approval is a major win, challenges remain:
- Public sector efficiency
- Social protection systems
- Continued debt negotiations
- Political stability
- Ensuring reforms do not burden low-income households
Still, this marks a major step forward in Sri Lanka’s economic rebuilding process.
Source: Reuters
