Friday Jan 16, 2026
Friday Jan 16, 2026
Friday, 16 January 2026 00:34 - - {{hitsCtrl.values.hits}}
An International Monetary Fund (IMF) team will visit Sri Lanka from 22 to 28 January on a fact-finding mission to assess the economic impact of Cyclone Ditwah and review its implications for the country’s reform program under the Extended Fund Facility (EFF).
IMF Communications Director Julie Kozack yesterday said the mission would focus on building a clearer understanding of the scale and scope of damage caused by the cyclone and how the shock has altered Sri Lanka’s macroeconomic trajectory.
“This is a fact-finding mission,” Kozack said. The objective is to gather an accurate picture of conditions on the ground as Sri Lanka navigates the combined pressures of economic adjustment and climate-related shocks.
She noted that the team would also discuss related policy implications under the EFF program, which has been guiding Sri Lanka’s economic reform agenda.
IMF Mission Chief for Sri Lanka Evan Papageorgiou in a statement yesterday said: “An IMF staff team will visit Sri Lanka from January 22 to January 28, 2026, to hold discussions with the authorities on the size and scope of the damage caused by Cyclone Ditwah. The findings of the mission will feed into subsequent discussions on the IMF-supported program.
“This mission underscores the IMF’s commitment to supporting Sri Lanka as it deals with the economic and humanitarian challenges caused by the recent cyclone. During the visit, the IMF team will engage with Government officials and relevant stakeholders to understand the full impact on infrastructure, livelihoods, and economic stability.
“The IMF team will explore how it can best assist Sri Lanka in its recovery efforts, including by resuming the Extended Fund Facility-supported program and offering policy advice and technical assistance to promote resilience and sustainable growth. Further communication will be provided at the end of the mission.”
The visit comes weeks after the IMF Executive Board on 19 December 2025 approved $ 206 million in emergency financing for Sri Lanka under the Rapid Financing Instrument (RFI), aimed at meeting urgent cyclone-related needs while preserving macroeconomic stability.
At the time, the IMF had concluded the Fourth Review under the ongoing EFF program and its Executive Board was expected to announce the outcome of the $ 347 million tranche after evaluating the 2026 Budget.
However, the IMF and Government have agreed to temporarily pause the EFF program after the devastating cyclone. An initial impact assessment of IMF staff suggested that Sri Lanka will likely face Balance of Payments and inflationary pressures this year.
The IMF said the current account deficit could widen by around $ 700 million, or 0.7% of GDP, over the next 12 months. Its projections show headline inflation rising to 4% year-on-year (YoY) in December 2025, from 2.1% in November, while average inflation in 2026 is expected to increase to 5.4%, compared with the 3.3% forecast at the time of the Fourth Review, above the Central Ban of Sri Lanka’s 5% target.
