The International Monetary Fund (IMF) staff and the Sri Lankan authorities have reached a staff-level agreement on the Seventh Review under Sri Lanka’s four-year Extended Fund Facility (EFF) arrangement and concluded discussions under the 2026 Article IV Consultation.
Subject to approval by the IMF Executive Board, Sri Lanka is expected to receive SDR 254 million, equivalent to approximately US$345 million. This would bring the total IMF financial support disbursed under the current EFF arrangement to about US$2.7 billion.
The IMF said Sri Lanka’s economy has remained resilient despite successive shocks, with economic activity expanding by 4.2% in the second quarter of 2026, marking the 11th consecutive quarter of growth. Headline inflation stood at 8% year-on-year in September, while gross official reserves reached US$6.9 billion at the end of August 2026.
According to IMF Mission Chief for Sri Lanka Evan Papageorgiou, the staff-level agreement remains subject to IMF Executive Board approval, following the presentation of Sri Lanka’s 2027 Budget to Parliament in line with programme parameters and completion of a financing assurances review.
The IMF noted that Sri Lanka continues to face downside risks arising from uncertainty over the duration and intensity of the war in the Middle East, global trade policy and the impact of El Niño.
The IMF has stressed the need for Sri Lanka to maintain prudent economic policies and continue with structural reforms to safeguard macroeconomic stability, strengthen revenue mobilisation, improve public investment management and support sustainable and inclusive economic growth.
The IMF team also highlighted the importance of maintaining cost-recovery energy pricing while protecting vulnerable groups through targeted and time-bound support, strengthening social safety nets, maintaining exchange-rate flexibility and preserving the integrity of the anti-corruption framework.
The IMF delegation visited Sri Lanka from September 10 to 23, 2026, and subsequently held virtual discussions with senior Sri Lankan officials to finalise the staff-level agreement.
