The International Monetary Fund’s Executive Board is expected to meet “within weeks” to consider approval of Sri Lanka’s combined fifth and sixth reviews under the Extended Fund Facility, a decision that would unlock roughly USD 700 million in financing, IMF Communications Director Julie Kozack said at a media briefing on Thursday.
Kozack confirmed the staff-level agreement reached on 9 April between the IMF team and Sri Lankan authorities is now subject only to Board approval, with several prior actions due to be completed before the programme is presented. Those include restoring cost-recovery pricing for electricity and fuel while protecting vulnerable groups, and completing the financing assurances review. She said the transition to cost recovery must move toward full pricing while safeguarding low-income households. The Island’s coverage of the same briefing framed Sri Lanka’s eligibility to draw the next $700 million tranche as “hinging on” the restoration of cost-recovery pricing — making explicit what the IMF presented as one of several prior actions.
Asked directly about the government’s Rs. 100 per litre diesel subsidy, Kozack declined to comment on the specific measure but reiterated that the programme requires both cost-recovery pricing reforms and safeguards for vulnerable communities.
The Communications Director described Sri Lanka’s recent performance as showing “remarkable resilience” in the face of two major shocks: Cyclone Ditwah, which she called “tragic and devastating,” and the ongoing war in the Middle East. Reforms implemented under the IMF programme over the past several years, she said, were beginning to deliver results.
Kozack confirmed Sri Lanka’s economy grew 5 percent in 2025 and described fiscal performance that year as “particularly strong,” driven largely by revenue improvements. Inflation has returned to positive levels from earlier negative territory, while debt restructuring is “nearing completion” and the debt-to-GDP ratio is projected to continue declining.
The updated “within weeks” timeline tightens the early-June window previously signalled by Mission Chief Evan Papageorgiou on 9 April, when the staff-level agreement was first announced. Sri Lankan markets have moved on the IMF timeline this week, with the rupee at Rs. 329 against the dollar and the Central Bank Governor confirming the GDP base at USD 109 billion.
