## Sri Lanka: Third Review Under the Extended Arrangement Under the Extended Fund Facility, Financing Assurances Review, and Monetary Policy Consultation Clause-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka

_IMF Staff Country Reports, March 3, 2025_

## Source details

**Canonical URL:** [Sri Lanka: Third Review Under the Extended Arrangement Under the Extended Fund Facility, Financing Assurances Review, and Monetary Policy Consultation Clause-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka](https://www.imf.org/en/publications/cr/issues/2025/03/03/sri-lanka-third-review-under-the-extended-arrangement-under-the-extended-fund-facility-562827)

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## Bibliographic details
- Published: March 3, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229003636.002

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### Executive summary and program performance
- The paper presents Sri Lanka’s Third Review under the Extended Arrangement under the Extended Fund Facility, Financing Assurances Review, and Monetary Policy Consultation Clause.
- Performance under the program has been strong.
- All quantitative targets for end-December 2024 were met, except the indicative target on social spending.
- Most structural benchmarks due by end-January 2025 were either met or implemented with delay.
- The recent successful completion of the bond exchange is a major milestone toward restoring debt sustainability.
- Reform efforts are bearing fruit with the recovery gaining momentum.
- As the economy is still vulnerable, sustaining the reform agenda is critical to put the economy on a path toward lasting recovery and debt sustainability.

### Fiscal policy and revenue mobilization
- Sustained revenue mobilization is crucial to restoring fiscal sustainability and ensuring that the government can continue to provide essential services.
- Continued implementation of fiscal reforms is implied as necessary to support debt sustainability following the bond exchange.

### Structural reforms and governance
- Prolonged structural challenges need to be addressed to unlock Sri Lanka’s long-term potential.
- Steadfast implementation of the governance reforms is emphasized as critical.

### Risk assessment and outlook
- Recovery is gaining momentum.
- The economy remains vulnerable, implying downside risks if reforms are not sustained.

### Subjects and keywords
- Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Credit, Crime, Money, Public debt, Revenue administration
- Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), COT. authorities, Credit, Global, IMF staff estimate, staff appraisal, tax concession, tax exemption

*Source: Sri Lanka: Third Review Under the Extended Arrangement Under the Extended Fund Facility, Financing Assurances Review, and Monetary Policy Consultation Clause-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka (March 3, 2025).*

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- **1lkaea2025001-print-pdf**
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_Source: https://www.imf.org/en/publications/cr/issues/2025/03/03/sri-lanka-third-review-under-the-extended-arrangement-under-the-extended-fund-facility-562827_