IMF lauds strong recovery in SL, cautions against global uncertainty

THE International Monetary Fund (IMF) last week lauded the continuous economic recovery by Sri Lanka under its Extended Fund Facility (EFF) with strong growth, easing inflation and improved reserves, whilst also cautioning on rising global uncertainty, fiscal constraint and unfinished reforms pose significant risks to sustaining these gains underscoring the need for steadfast policy implementation and targeted support for the vulnerable.

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After constructive discussions in Colombo, Papageorgiou issued the following statement:

"Sri Lanka's ambitious reform agenda supported by the IMF Extended Fund Facility (EFF) continues to deliver commendable outcomes. The post-crisis growth rebound of 5% in 2024 is impressive. Inflation declined considerably in recent quarters and has fallen to 2.6% at end-March 2025. Gross official reserves increased to $ 6.5 billion at end-March 2025 with sizable foreign exchange purchases by the central bank. Substantial fiscal reforms have strengthened public finances.

"The recent external shock and evolving developments are creating uncertainty for the Sri Lankan economy, which is still recovering from its own economic crisis. More time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program.