IMF sees reserves up 7% in 2025 to $ 6.5 b; current account to turn deficit in 2026

Tuesday, 30 December 2025 03:36 - - {{hitsCtrl.values.hits}}

IMF projects reserves to accelerate from 2026, rising to $ 8.9 b in 2026 and $ 13.4 b in 2027
External debt seen falling 6.5% in 2025, while current account surplus narrows sharply before turning negative in 2026

The International Monetary Fund (IMF) has projected Sri Lanka’s gross official reserves to grow 7% year-on-year (YoY) to $ 6.55 billion by end-2025, suggesting a year of incremental reserve accumulation rather than a step change, with materially stronger buffers only emerging over the medium term amid continued near-term pressure on the current account.

In its latest assessment, the IMF forecasts reserves to rise from $ 6.12 billion in 2024 to $ 6.55 billion in 2025, before accelerating sharply over the next few years. This is below the $ 7 billion “aspirational target” announced by the President and the Central Bank of Sri Lanka (CBSL).

The IMF expects reserves to increase 36% YoY to $ 8.9 billion in 2026 and a further 51% to $ 13.4 billion in 2027, assuming continued program implementation and external financing inflows.

The IMF also expects Sri Lanka’s external debt stock to decline 6.5% YoY to $ 53.4 billion by end-2025 from $ 57.1 billion in 2024, reflecting debt restructuring and limited new borrowings.

However, external debt is projected to rise again to $ 55.6 billion in 2026 and $ 59.5 billion in 2027 as repayments ease and financing needs increase.

On external accounts, the Fund projects a sharp narrowing of the current account surplus in the near term. The surplus is forecast to fall 65% YoY from $ 1.73 billion in 2024 to $ 604 million in 2025, before turning into a deficit of $ 386 million in 2026. A modest surplus of $ 107 million is expected to return in 2027.