President Anura Kumara Dissanayake has said that the government is open to entering into a fresh agreement with the International Monetary Fund (IMF) after the current programme ends in March 2027.
Speaking during the Sri Lanka Economic and Investment Summit 2026 on Monday, President Dissanayake said that a new agreement, if pursued, would focus on an economic growth.
However, no final decision has been taken yet on whether the country will seek another programme, with the President saying the Government has neither decided to end its engagement with the IMF nor committed itself to a fresh agreement.
Background
The IMF is a global financial institution that provides loans and policy advice to countries facing balance-of-payments problems.
Sri Lanka turned to the IMF after its severe 2022 economic crisis, which saw acute shortages of fuel, medicine and foreign exchange.
In March 2023, the IMF approved a 48-month Extended Fund Facility worth about USD 3 billion to support Sri Lanka’s economic recovery.
President’s comments
President Dissannayake said Sri Lanka has made considerable progress in restoring economic stability, including improved international credit ratings, since the National People’s Power government came into power.
However, he noted that foreign exchange reserves have yet to reach the desired level and the country’s credit standing still needs further improvement.
According to the President, the current IMF programme mainly focused on restoring stability after the economic crisis.
He said any future agreement should shift greater attention to economic growth, without reversing the stability gained under the existing programme.
Senior officials from the Finance Ministry and the Central Bank are discussing what form a possible successor programme could take.
The President said the Government would be prepared to enter a new agreement if it could reach an understanding with the IMF that supports Sri Lanka’s growth objectives.
Any decision will depend on the state of the economy, the strength of foreign reserves and Sri Lanka’s ability to withstand external shocks, the President added.
The President warned that the Middle East conflict could push Sri Lanka’s fuel import bill to around USD 6 billion in 2026, up from about USD 4.04 billion in 2025.
He said rising fuel import costs would increase pressure on foreign exchange reserves at a time when the Government is trying to strengthen the country’s external buffers.
The President also defended the Government’s cooperation with the IMF, saying there have been relatively few contradictions between its economic objectives and the commitments under the current programme.
Current status
Sri Lanka has received six installments of financing as part of the agreement, with the seventh tranche pending IMF Executive Board approval.
About six months remain under the current arrangement, and the Government plans to use that period to assess its options before deciding on its future relationship with the IMF.
Sri Lanka has sought or received IMF support on 17 occasions since joining the institution.
Conditions
Under the programme, Sri Lanka must continue revenue-based fiscal consolidation, maintain cost-reflective energy pricing, control expenditure, rebuild foreign reserves and safeguard financial stability.
It must also complete debt-restructuring commitments and maintaining financing assurances from official creditors and multilateral partners.
For the pending seventh review, the 2027 Budget must be presented to Parliament in line with IMF programme parameters, and the financing-assurances review must be completed.
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