March 01, Colombo (LNW): The International Monetary Fund (IMF) on Friday (01) confirmed that it had completed the third review of Sri Lanka’s 48-month Extended Fund Facility (EFF) programme, unlocking an additional disbursement of SDR 254 million (approximately US$334 million).
This new allocation brings the total financial assistance provided to Sri Lanka under the current arrangement to SDR 1.02 billion (around US$1.34 billion).
According to the IMF, Sri Lanka’s performance under the EFF programme has remained strong, with the government meeting all key quantitative targets set for the end of December 2024.
However, the country missed the indicative target for social spending, which the IMF noted in its latest report.
In terms of structural benchmarks, most were either met or, in some cases, implemented with a slight delay. A notable achievement highlighted by the IMF was the successful completion of a bond exchange, which marks a significant step in Sri Lanka’s efforts to restore its debt sustainability.
The IMF also commended the Sri Lankan authorities for their ongoing reform programme, which has contributed to a steady economic recovery.
Despite these positive developments, the IMF stressed that the economy remains vulnerable and warned that the continuation of the reform agenda is crucial for achieving long-term recovery and ensuring the sustainability of the country’s debt.
The EFF arrangement, which was initially approved by the IMF’s Executive Board on March 20, 2023, amounts to SDR 2.286 billion (approximately US$3 billion or 395 percent of Sri Lanka’s quota in the IMF).
The programme is designed to support Sri Lanka’s efforts to stabilise its macroeconomic environment, reduce debt levels, protect the most vulnerable populations, rebuild external reserves, and implement growth-focused structural reforms, particularly in improving governance.
