The International Monetary Fund (IMF) has approved and completed the third review of Sri Lanka’s 48-month Extended Fund Facility (EFF), enabling an immediate disbursement of approximately 334 million US dollars. This brings the total IMF financial support for Sri Lanka to about 1.34 billion US dollars since the program’s approval in March 2023. While approving the third review, the IMF commended Sri Lanka’s strong performance under the program, noting that all quantitative targets for December 2024 were met, except for the indicative target on social spending.
It noted that most structural benchmarks due by January 2025 were either achieved or implemented with minor delays. A significant milestone in this period was the successful completion of a bond exchange, contributing to the nation’s efforts to restore debt sustainability. Economic indicators reflect a positive trajectory, with inflation remaining low, improved revenue collection, and a steady accumulation of reserves. The economy expanded by an average of 4.3 per cent since growth resumed in the third quarter of 2023.
The IMF has emphasised the importance of sustaining reform momentum to ensure continued macroeconomic stability, debt sustainability, and inclusive long-term growth.
The IMF has also highlighted the necessity of finalising bilateral agreements with creditors to advance debt restructuring efforts. The bilateral debt restructuring was coordinated by the Official Creditor Committee last year, led by India, Japan and France and the restructuring.
