{ "title": "IMF Staff Concludes Visit to Sri Lanka", "publication": "IMF News, June 30, 2026", "sourceUrl": "https://www.imf.org/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit", "canonical": "https://www.imf.org/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit", "overlayPath": "/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/index.md", "summary": "The Sri Lankan authorities’ prompt action amid the Middle East war helped preserve macroeconomic and social stability. Gains from their economic reform program provided space for policy response.", "publishDate": "2026-06-30", "sections": [ { "heading": "Mission background", "content": "- Press Release No. 26/229\n- Mission led by Mr. Evan Papageorgiou.\n- Visit dates: June 24 to 30.\n- Purpose: take stock of recent macroeconomic developments and discuss progress in implementing the economic reform program supported by the IMF’s Extended Fund Facility (EFF) arrangement.\n- Meetings held with: His Excellency the President and Finance Minister Anura Kumara Dissanayake; the Honorable Prime Minister Dr. Harini Amarasuriya; Honorable Labor Minister and Deputy Minister of Finance and Planning Prof. Anil Jayantha Fernando; Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe; Secretary to the Treasury Dr. Harshana Suriyapperuma; Senior Economic Advisor to the President Mr. Duminda Hulangamuwa; Chief Advisor to the President on Digital Economy Dr. Hans Wijayasuriya; other senior government and CBSL officials; private sector, civil society organizations, and development partners." }, { "heading": "Recent macroeconomic developments and impacts", "content": "- The Middle East war has weighed on Sri Lanka’s economy.\n- Headline inflation rose from 1.6 percent y/y in February 2026 to 5.5 percent y/y in May following energy price increases.\n- Tourist arrivals growth softened.\n- Gross international reserves accumulation decelerated.\n- Central Bank response: a 100-basis point policy rate hike and deployment of macroprudential measures.\n- Government response: a temporary, on-budget, relief package comprising fuel, electricity, and fertilizer subsidies, as well as cash transfers to the most vulnerable households.\n- Recent decline in global commodity prices offers some relief from external pressures, though uncertainty remains high." }, { "heading": "Fiscal policy, public finances, and expenditure execution", "content": "- Authorities committed to reverting to the primary balance target of 2.3 percent of GDP in 2027 following fiscal easing in 2026.\n- Recommended fiscal actions:\n - Continue efforts to improve tax compliance and broaden the tax base.\n - Enhance public financial management, including preventing the reemergence of expenditure arrears.\n - Resolve bottlenecks to spending execution—including disaster-related support—for effective post-cyclone recovery and reconstruction.\n - Accelerate reform of state-owned enterprises.\n - Maintain cost-recovery energy pricing to minimize fiscal risks.\n - Prioritize adequate targeting and coverage of social safety nets to protect vulnerable families." }, { "heading": "Monetary policy, external adjustment, and financial stability", "content": "- Monetary policy guidance:\n - Monetary policy should remain prudent, agile, and data-dependent to safeguard price stability under heightened global uncertainty.\n - Exchange rate flexibility is paramount to support external adjustment in the face of shocks without undermining reserve accumulation.\n - Foreign exchange intervention should be limited to addressing excessive volatility.\n - Balance of payments restrictions should be phased out.\n- Financial sector safeguards:\n - Strengthen operational risk, cybersecurity, and AML/CFT safeguards to preserve financial stability." }, { "heading": "Debt management and market access", "content": "- Debt restructuring is nearing completion.\n- IMF recommendation: accelerate progress toward building capacity of the Public Debt Management Office to:\n - promote prudent debt management practices;\n - deepen domestic debt markets;\n - support Sri Lanka’s eventual return to international capital markets." }, { "heading": "Structural reforms and growth agenda", "content": "- Building resilience to shocks and achieving strong, durable, and inclusive growth requires:\n - steadfast implementation of governance reforms;\n - bold reforms to improve the efficiency and fairness of the tax system;\n - liberalization of trade;\n - addressing labor market rigidities;\n - enhancing the business environment to attract investment, create jobs, and bring poverty rates down." }, { "heading": "Program assessment and next steps", "content": "- Progress in meeting commitments under the IMF-supported program will be formally assessed in the context of the Seventh Review of the Extended Fund Facility (EFF) arrangement in the upcoming IMF mission in the fall.\n- The dates of the mission will be announced in due time.\n- The mission noted that the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.\n\nIMF Communications Department — Press Release dated June 30, 2026\n\n---\n\n Content in this bundle\n\n- Press Release-English\n - Press Release-English (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Press Release-English (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Sri Lanka and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit" } ], "bullets": [ "[Markdown version](/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/index.md)", "[Structured JSON version](/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/index.json)", "[Bundle manifest](/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/bundle-manifest.json)", "Published: June 30, 2026", "Press Release No. 26/229", "Mission led by Mr. Evan Papageorgiou.", "Visit dates: June 24 to 30.", "Purpose: take stock of recent macroeconomic developments and discuss progress in implementing the economic reform program supported by the IMF’s Extended Fund Facility (EFF) arrangement.", "Meetings held with: His Excellency the President and Finance Minister Anura Kumara Dissanayake; the Honorable Prime Minister Dr. Harini Amarasuriya; Honorable Labor Minister and Deputy Minister of Finance and Planning Prof. Anil Jayantha Fernando; Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe; Secretary to the Treasury Dr. Harshana Suriyapperuma; Senior Economic Advisor to the President Mr. Duminda Hulangamuwa; Chief Advisor to the President on Digital Economy Dr. Hans Wijayasuriya; other senior government and CBSL officials; private sector, civil society organizations, and development partners.", "The Middle East war has weighed on Sri Lanka’s economy.", "Headline inflation rose from 1.6 percent y/y in February 2026 to 5.5 percent y/y in May following energy price increases.", "Tourist arrivals growth softened.", "Gross international reserves accumulation decelerated.", "Central Bank response: a 100-basis point policy rate hike and deployment of macroprudential measures.", "Government response: a temporary, on-budget, relief package comprising fuel, electricity, and fertilizer subsidies, as well as cash transfers to the most vulnerable households.", "Recent decline in global commodity prices offers some relief from external pressures, though uncertainty remains high.", "Authorities committed to reverting to the primary balance target of 2.3 percent of GDP in 2027 following fiscal easing in 2026.", "Recommended fiscal actions:", "Monetary policy guidance:", "Financial sector safeguards:", "Debt restructuring is nearing completion.", "IMF recommendation: accelerate progress toward building capacity of the Public Debt Management Office to:", "Building resilience to shocks and achieving strong, durable, and inclusive growth requires:", "Progress in meeting commitments under the IMF-supported program will be formally assessed in the context of the Seventh Review of the Extended Fund Facility (EFF) arrangement in the upcoming IMF mission in the fall.", "The dates of the mission will be announced in due time.", "The mission noted that the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.", "**Press Release-English**", "[Sri Lanka and the IMF](http://www.imf.org/external/country/LKA/index.htm)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "related": [ { "title": "Press Release-English", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/news/press-release/2026/sri-lanka-press-release-june-2026-staff-visit-tamil.pdf", "summary": { "path": "/-/media/files/news/press-release/2026/sri-lanka-press-release-june-2026-staff-visit-tamil.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/news/press-release/2026/sri-lanka-press-release-june-2026-staff-visit-tamil.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/index.md", "json": "/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/index.json", "bundleManifest": "/en/news/articles/2026/06/30/pr26229-sri-lanka-imf-staff-concludes-visit/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T04:46:57.434Z" }