The International Monetary Fund’s combined fifth and sixth review mission is currently in Colombo, with discussions scheduled through April 9 — the same date a 44 percent US tariff on Sri Lankan exports takes effect.
The IMF delegation, led by Mission Chief Evan Papageorgiou, met President Anura Kumara Dissanayake at the Presidential Secretariat on Thursday. The Fund acknowledged that Sri Lanka has “transitioned towards a more resilient economic footing” through improved revenue management and stronger foreign reserves.
However, the review comes at a critical juncture. Sri Lanka faces a dual external shock: the Middle East conflict has driven up energy costs and disrupted key Gulf transit routes, while the impending 44 percent Trump tariff threatens roughly $3 billion in US-bound exports, primarily in the apparel sector.
Dissanayake told the delegation that Sri Lanka had “met all targets set under the programme” and stressed “the need to take all necessary measures to minimize the impact on the public.” The government is seeking flexibility in programme milestones, arguing that the Middle East crisis and US tariffs constitute external shocks beyond Colombo’s control.
The IMF team acknowledged that “the ongoing conflict situation in the Middle East poses an external challenge, the impact of which on Sri Lanka cannot be entirely avoided.”
Sri Lanka’s Extended Fund Facility programme, in place since 2023, sets targets for fiscal consolidation and debt restructuring. The Fund revised Sri Lanka’s 2026 growth forecast downward at its April 2 meeting. Private discussions reportedly touched on whether electricity tariff hike timelines could be adjusted given the energy crisis.
The review’s outcome will be closely watched by markets and creditors as Sri Lanka navigates what may be its most challenging period since the 2022 economic collapse.
