An International Monetary Fund (IMF) team, under the leadership of Evan Papageorgiou, concluded a visit to Colombo, Sri Lanka, from April 3 to April 11, 2025. During the visit, the team engaged in constructive discussions regarding Sri Lanka's reform agenda supported by the IMF Extended Fund Facility.
Evan Papageorgiou emphasized the progress of Sri Lanka's economic reforms in a statement. "Sri Lanka’s ambitious reform agenda supported by the IMF Extended Fund Facility (EFF) continues to deliver commendable outcomes. The post-crisis growth rebound of 5 percent in 2024 is impressive," he noted. "Inflation declined considerably in recent quarters and has fallen to -2.6 percent at end-March 2025."
The IMF team highlighted the increase in Sri Lanka's gross official reserves and the strengthening of public finances through substantial fiscal reforms. Nonetheless, global uncertainties pose challenges for the recovering Sri Lankan economy. Papageorgiou commented on the requisite time to evaluate the impact of global shocks on the country's economy within the framework of its IMF-supported program.
He stressed, "The government’s sustained commitment to program objectives is ensuring policy continuity and program implementation remains strong. Going forward, sustaining the reform momentum is critical to safeguard the hard-won gains of the program and put the economy on a path toward lasting macroeconomic stability and higher inclusive growth."
Papageorgiou pointed out the necessity of sustaining revenue mobilization efforts and prudent budget execution amid global uncertainties. "Boosting tax compliance, including by reinstating an efficient and timely VAT refund mechanism, will help contribute to revenue gains without resorting to additional tax policy measures," he said.
The importance of targeted social safety nets and fiscal support for the vulnerable populations was also underscored. Papageorgiou addressed the need for continued inflation monitoring to maintain price and macroeconomic stability. He encouraged the continued progress on crucial structural reforms, including electricity pricing and tax exemptions.
The IMF team's discussions involved key government officials and stakeholders, including President Anura Kumara Dissanayake, Prime Minister Dr. Harini Amarasuriya, and other senior figures. "We would like to thank the authorities for the excellent collaboration during the mission," Papageorgiou expressed. "Discussions are continuing with the goal of reaching staff-level agreement in the near term to pave the way for the timely completion of the fourth review."
The visit aimed to reaffirm the IMF's commitment to supporting Sri Lanka through its economic recovery efforts amid global uncertainties.