IMF Keeps Sri Lanka Programme Intact After Cyclone Review

Picture Credit: Al Jazeera

Sri Lanka’s Extended Fund Facility (EFF) with the International Monetary Fund will continue unchanged, following an IMF mission to the country that assessed the economic impact of Cyclone Ditwah, according to the Presidential Media Division (PMD).

While the IMF team was initially expected to complete the fifth review of the programme, clearing the way for the release of the sixth tranche, the visit instead focused on evaluating damage caused by the recent natural disaster. As a result, discussions on the next disbursement have been postponed.

Despite the setback, IMF representatives reportedly expressed confidence in Sri Lanka’s broader economic trajectory, noting that the country remains on a stable path even amid severe disruptions. The global lender confirmed that no revisions would be made to the existing EFF arrangement and that talks on releasing the sixth tranche would resume in March.

The delay means the tranche, originally expected to be approved in December 2025, will now be pushed further into 2026.The IMF also acknowledged the government’s ability to present a supplementary budget estimate of Rs. 500 billion, made possible by a surplus in the Treasury. This, the PMD said, was viewed by the IMF as a positive signal of improved fiscal management.

President Anura Kumara Dissanayake stressed that the supplementary estimate does not reflect a shift away from fiscal discipline, adding that future government programmes have been designed within the same framework of financial responsibility. He reiterated Sri Lanka’s expectation of continued IMF support as the reform programme moves forward.