The International Monetary Fund (IMF) has said that the completion of Sri Lanka’s combined Fifth and Sixth reviews under its Extended Fund Facility (EFF) is subject to approval by its Executive Board, with a meeting expected in the coming weeks.

Responding to questions at a press briefing held on 14 May, IMF Communications Department Director Julie Kozack said a staff-level agreement between IMF staff and Sri Lankan authorities was reached on 9 April.

She said several prior actions were required before the programme could be presented to the Board, including the restoration of cost-recovery pricing in electricity and fuel, alongside measures to protect vulnerable groups, as well as completion of financing assurances.

Kozack noted that once the review is approved, Sri Lanka would gain access to about US$700 million in financing.

Asked whether the government’s current fuel subsidy, including a 100-rupee per litre diesel subsidy, is consistent with the IMF’s cost-recovery pricing framework, Kozack did not directly comment on the specific measure. Instead, she reiterated that the programme requires both cost-recovery pricing reforms and protections for vulnerable populations.

She also said Sri Lanka has faced “two very large shocks” recently, referring to Cyclone Ditwah and broader external impacts from the Middle East conflict, adding that these have affected the economy and the population.

Despite this, she said Sri Lanka’s reform programme was showing results, pointing to strong fiscal performance in 2025, progress in debt restructuring, 5 per cent economic growth, and a return of inflation to positive territory after a period of deflation.

She further said the IMF remains committed to supporting Sri Lanka as it continues its reform agenda, reaffirming that the institution’s engagement with the country remains strong as it works alongside the authorities to maintain economic stability and progress. 

IMF Press Briefing: https://www.imf.org/en/news/articles/2026/05/14/tr051426-imf-regular-briefing-may-14-2026 (Newswire)

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