Sri Lanka Open to New IMF Agreement But No Final Decision Yet

COLOMBO (News 1st); President Anura Kumara Dissanayake says Sri Lanka has made significant progress in stabilising its economy under the current International Monetary Fund (IMF) Extended Fund Facility programme, but stressed that the country's next challenge will be maintaining that stability while pursuing stronger economic growth.

Addressing the future of Sri Lanka's engagement with the IMF, the President said the primary objective of the current four-year programme had been to restore macroeconomic stability following the country's economic crisis.

He noted that Sri Lanka has already made considerable progress towards that goal, pointing to improvements in the country's credit ratings and broader economic indicators.

"We have moved up in terms of ratings. However, there is still further progress that needs to be made. Our foreign reserves have not yet reached the level we expect. If we can strengthen these factors further, we can move ahead," he said.

The President cautioned, however, that growing uncertainty in the global economy remains a major concern for policymakers.

He pointed to the sharp rise in Sri Lanka's fuel import bill as an example of the vulnerabilities the country continues to face from external shocks.

According to Dissanayake, Sri Lanka spent approximately US$4.442 billion on fuel imports in 2025. By August this year alone, the country's fuel import expenditure had already reached US$4.482 billion.

He warned that if the current trend continues, Sri Lanka's annual fuel import bill could rise to nearly US$6 billion, raising questions about the economy's ability to absorb such costs.

"The first four-year IMF programme was designed to restore stability. I believe we have achieved a significant degree of stability in many respects. Now our next objective is how to maintain that stability while achieving growth," he said.

The President revealed that the Government is currently discussing what form a future programme with the IMF should take, if one is pursued after the conclusion of the current arrangement.

He said the Government has reviewed its policy objectives since assuming office and assessed whether commitments under the IMF programme had prevented the administration from implementing key priorities.

According to the President, only a very limited number of policy ambitions had been constrained by the existing agreement.

"That is why, I believe, we have been able to proceed without major conflict. Otherwise, we would not have been able to continue with the programme for four years. Many programmes around the world have broken down before completion," he said.

Dissanayake noted that there has not been any major disagreement between the Government and the IMF and that discussions are currently centred on what type of economic programme would best suit the country's future requirements.

He said officials from the Ministry of Finance, the Central Bank and a team of economic advisors are examining various options and assessing the direction of the economy before making a final decision.

While noting that six to seven months remain under the current arrangement, the President stressed that the Government has kept all options open.

"We are not in a position where we have completely ruled it out, nor are we saying that we must definitely continue. We remain open-minded," he said.

The President further stated that policymakers are evaluating the economy's ability to withstand both domestic and external shocks before deciding on a future arrangement.

He added that while Sri Lanka may now be in a stronger position to absorb internal pressures, the scale of potential external shocks remains uncertain, particularly amid growing volatility in the global economy.

"We are assessing how strong our economy is in the face of external shocks and how those risks may evolve. It is based on those forecasts that we will consider any future programme," Dissanayake said.