IMF says reviewing 2026 Budget; decision to release next tranche in coming weeks

Friday, 14 November 2025 00:30 - - {{hitsCtrl.values.hits}}

Stresses need for Sri Lanka to continue reforms, including trade liberalisation, governance
Notes protecting vulnerable groups should be a priority

Director of Communications Julie Kozack

The International Monetary Fund (IMF) yesterday said it was reviewing the 2026 Budget unveiled by President Anura Kumara Dissanayake a week ago.

IMF Director of Communications Julie Kozack said the Executive Board would review the Budget and consider Sri Lanka’s Fifth Review under the Extended Fund Facility (EFF) in the coming weeks, a decision that will release $ 347 million in financing.

An IMF staff-level agreement had already been reached with the Government.

Kozack said the agreement, concluded on 9 October, clears the way for Board consideration.

“Once the review is approved by the IMF Executive Board, Sri Lanka will have access to $ 347 million in financing. We expect the Board meeting to take place in the coming weeks,” she told a regular press briefing in Washington DC.

Kozack said the IMF is assessing whether the fiscal framework aligns with commitments under the program. “This assessment will be an important part of the review that will be discussed by the Board,” she added.

Kozack noted the importance of maintaining the reform effort, saying structural changes remain essential for strengthening Sri Lanka’s growth outlook. She identified progress in trade liberalisation, more streamlined regulation around foreign direct investment, accelerated governance reforms, and stronger social protection systems as key areas that require continued focus.

“Continuing to protect the vulnerable should remain a priority going forward,” Kozack said.

Earlier this week, Fitch said Sri Lanka’s 2026 Budget keeps the country on its fiscal reform trajectory, though slower revenue growth, underspending on investment, and post-IMF debt risks could weigh on the outlook.

It said that the Sri Lankan Government’s latest Budget indicates that the authorities remain committed to reducing Government debt/GDP over the medium term after beating their targets in the 2025 Budget. Strong revenue performance will remain key to meeting the Government’s fiscal goals.