President keeps door open to fresh IMF deal

President Anura Kumara Dissanayake yesterday said Sri Lanka was open to entering a fresh International Monetary Fund (IMF) program after its current arrangement ends, but stressed that no decision had been taken as the Government weighs growth ambitions against the need to preserve economic stability.

President keeps...

Speaking during a fireside chat at the inauguration of the Sri Lanka Economic and Investment Summit 2026, organised by the Ceylon Chamber of Commerce, the President said discussions were underway on the possibility of a new agreement that would shift the focus from crisis recovery towards economic growth without reversing the gains made under the existing IMF-backed program.

“We are at a mid-level and open about it,” he said, adding that the Government would use the remaining six months of the current arrangement to assess its options before determining the future of its engagement with the Fund.

The President said Sri Lanka had made considerable progress in restoring economic stability with improved international ratings, but foreign exchange reserves still needed to reach the desired level and the country’s credit standing required further improvement.

Any decision on a successor program would depend on the state of the economy, the strength of reserves and the extent to which Sri Lanka could withstand further external shocks amid heightened global uncertainty.

Dissanayake warned that Sri Lanka’s fuel import expenditure could rise to around $ 6 billion in 2026 if current trends continued. “In 2025, the fuel import bill for the year was over $ 4.04 billion ($ 4,042 million) and during the first eight months of 2026 it has reached over $ 4.08 billion ($ 4,082 million),” he said, highlighting the potential impact of the Middle East conflict on the country’s external position.

The projected increase would place additional pressure on foreign exchange requirements at a time when the Government is seeking to consolidate the recovery and strengthen its external buffers.

The President said the evolving international situation was among the factors that would shape the Government’s assessment of whether the economy could withstand further shocks without additional support.

However he did not indicate that a new IMF program was inevitable, though his remarks suggest that the decision will be influenced by the resilience of the recovery and the country’s capacity to manage external risks.

The President said the existing IMF program had primarily focused on restoring economic stability following the crisis, while a possible successor arrangement should give greater weight to growth.

“We are examining what form such an agreement could take, with senior economic officials, including representatives of the Finance Ministry and the Central Bank, involved in discussions,” he added.

He said the administration would be prepared to enter into another agreement if it could reach an understanding with the IMF that supported Sri Lanka’s economic growth objectives.

However, he reiterated that the Government had neither decided to end its engagement with the Fund nor committed itself to a fresh program.

The President also defended the Government’s cooperation with the IMF, noting there had been relatively few contradictions between the administration’s economic objectives and the commitments under the current program. “This has enabled implementation to continue without major disagreements,” he stressed.

Sri Lanka has entered into or sought IMF support on 17 occasions since joining the institution. Its current arrangement is a 48-month Extended Fund Facility (EFF) approved on 20 March 2023, with financing of approximately $ 3 billion, equivalent to SDR 2.286 billion. The program is scheduled to run until 19 March 2027.