The International Monetary Fund (IMF) has approved the release of US$ 347 million to Sri Lanka following its third successful program review, further strengthening the country’s path toward fiscal consolidation and macroeconomic stability.
This latest disbursement under the Extended Fund Facility (EFF) brings the total IMF support to over US$ 1 billion since the program began in 2023. The IMF credited Sri Lanka’s strong policy performance, particularly in revenue-based fiscal consolidation, improved public financial management, and financial sector stabilization.
IMF Mission Chief Peter Breuer noted that Sri Lanka’s performance has exceeded expectations in several reform areas, including energy pricing transparency, central bank independence, and public debt restructuring progress. However, he cautioned that sustained commitment to reforms remains critical to achieving long-term resilience.
The government, in response, reaffirmed its dedication to maintaining fiscal discipline, expanding digital governance, and strengthening tax administration to secure revenue stability. Central Bank data indicates that foreign reserves have now surpassed US$ 5 billion, reflecting enhanced confidence in the domestic economy.
The IMF also highlighted Sri Lanka’s progress in protecting vulnerable groups through targeted welfare programs, including the Aswesuma social support scheme, which has reached over 1.5 million low-income households.
Analytical Insight
The IMF’s decision to unlock the latest tranche marks a vote of confidence in Sri Lanka’s reform progress. It provides the financial breathing space necessary to sustain ongoing restructuring efforts. However, consistent political commitment and effective governance will determine whether these macro-level improvements translate into long-term prosperity for citizens.
