Sri Lanka has received a loan tranche of US$695 million following the successful completion of the fifth and sixth reviews under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) programme, Deputy Minister of Finance Anil Jayantha Fernando confirmed.
The latest review was approved during the IMF Executive Board meeting held on May 27.
With this latest disbursement, the total financial assistance released to Sri Lanka under the IMF programme has increased to approximately US$2.4 billion.
According to a recent IMF statement announcing the approval, Sri Lanka’s economic reform programme continues to show “overall robust” progress despite domestic and global challenges, including the impact of Cyclone Ditwa and instability in the Middle East.
The IMF noted that Sri Lanka had met all quantitative performance criteria by the end of December 2025, while most structural reform benchmarks had either been completed on schedule or implemented with only minor delays.
The Fund also confirmed that Sri Lanka had fulfilled the preconditions required for reinstating cost-reflective pricing mechanisms for fuel and electricity.
Looking ahead, the IMF projects that Sri Lanka’s economic growth rate, which stood at 5 percent in 2025, could slow to around 3 percent in 2026 due to higher oil prices and global uncertainties linked to regional conflicts.
Inflation is also projected to rise toward 5 percent in 2026, while the country’s current account balance is expected to return to a deficit position.
While the IMF noted that monetary policy easing may be appropriate in 2026 to manage economic shocks and recovery-related costs, including post-Cyclone Ditwa reconstruction expenses, it emphasized that Sri Lanka should return to fiscal consolidation targets from 2027 onward.
