President Anura Kumara Dissanayake says the Government is keeping its options open on a future International Monetary Fund (IMF) programme, as Sri Lanka seeks to preserve economic stability while pursuing stronger growth amid mounting external risks
By The Pulseline News Desk
Sri Lanka has made significant progress in restoring macroeconomic stability under its current four-year IMF Extended Fund Facility (EFF) but sustaining that progress while accelerating economic growth will be the next major challenge, President Anura Kumara Dissanayake has said.
The President said the Government had not yet decided whether to pursue another programme with the IMF after the current arrangement concludes, with officials assessing the country’s economic resilience and future financing requirements before deciding.
Speaking about the future of Sri Lanka’s engagement with the IMF, Dissanayake said the primary objective of the existing programme had been to restore stability following the country’s economic crisis, adding that considerable progress had been made towards that goal.
He pointed to improvements in Sri Lanka’s credit ratings and broader economic indicators, while acknowledging that foreign reserves remained below the levels expected by the Government.
“We have moved up in terms of ratings. However, there is still further progress that needs to be made. Our foreign reserves have not yet reached the level we expect. If we can strengthen these factors further, we can move ahead,” he said.
However, the President warned that growing uncertainty in the global economy continued to expose Sri Lanka to external shocks, with rising fuel import costs highlighting the country’s vulnerability.
According to Dissanayake, Sri Lanka spent approximately US$4.442 billion on fuel imports in 2025. By August 2026, expenditure had already reached US$4.482 billion.
If the trend continues, the annual fuel import bill could approach US$6 billion, placing additional pressure on the country’s external finances and raising concerns about its ability to absorb further economic shocks.
“The first four-year IMF programme was designed to restore stability. I believe we have achieved a significant degree of stability in many respects. Now our next objective is how to maintain that stability while achieving growth,” he said.
Post-IMF programme under review
The Government is currently examining what form its future engagement with the IMF should take, if it decides to continue with a programme after the existing arrangement ends.
Dissanayake said the administration had reviewed its policy objectives since assuming office and assessed whether commitments under the IMF programme had restricted its ability to implement key priorities.
According to the President, only a limited number of policy ambitions had been constrained by the existing agreement, allowing the Government to continue implementing its agenda without major disagreements with the Fund.
“That is why, I believe, we have been able to proceed without major conflict. Otherwise, we would not have been able to continue with the programme for four years. Many programmes around the world have broken down before completion,” he said.
He added that there had been no major disagreements between the Government and the IMF, with current discussions focusing on the type of economic programme that would best serve Sri Lanka’s future needs.
Officials from the Ministry of Finance and the Central Bank, together with a team of economic advisers, are examining different options and assessing the country’s economic outlook before a final decision is made.
Although six to seven months remain under the current arrangement, the President said the Government had not committed itself either to continuing with the IMF or to ending its engagement with the Fund.
“We are not in a position where we have completely ruled it out, nor are we saying that we must definitely continue. We remain open-minded,” he said.
External risks remain a concern
The President said the decision would depend largely on the economy’s capacity to withstand domestic and external shocks, particularly as global economic conditions become increasingly unpredictable.
While Sri Lanka may now be better positioned to absorb domestic pressures, he cautioned that the potential scale and impact of external shocks remained uncertain.
The sharp increase in fuel import expenditure illustrates the challenges facing policymakers as they seek to protect economic stability while creating room for growth.
Dissanayake said the Government was assessing the economy’s resilience and forecasting how external risks might evolve before deciding on a future arrangement with the IMF.
“We are assessing how strong our economy is in the face of external shocks and how those risks may evolve. It is based on those forecasts that we will consider any future programme,” he said.
The Government’s decision will therefore involve balancing the need to maintain economic discipline and strengthen external buffers against its broader objective of delivering sustainable growth.
With the current IMF arrangement approaching its final months, the central question for policymakers is no longer simply whether Sri Lanka has stabilised its economy, but whether it can preserve those gains while reducing its vulnerability to external shocks and expanding economic opportunities.
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