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IMF to release next tranche of Extended Fund Facility

Published

8 months ago

2025/10/10

The International Monetary Fund yesterday said it had reached a staff-level agreement on the fifth review under Sri Lanka’s extended fund facility arrangement.

“Once the review is approved by the IMF Executive Board, Sri Lanka will have access to about US$347 million in financing,” a statement issued by the IMF said.

An IMF mission team led by Evan Papageorgiou visited Sri Lanka from September 24 to yesterday (9) to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the Extended Fund Facility (EFF) arrangement. At the end of the mission, Papageorgiou issued the following statement:

“IMF staff and the Sri Lankan authorities have reached staff-level agreement on the Fifth Review under the 4-year Extended Fund Facility (EFF) arrangement. The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.3 billion (about US$3 billion) on March 20, 2023.

“The staff-level agreement is subject to IMF Executive Board approval, contingent on: (i) Parliamentary approval of the 2026 Appropriation Bill in line with program parameters and (ii) the completion of the financing assurances review, to confirm multilateral partners’ financing contributions and assess adequate progress with debt restructuring.

“Upon completion of the Executive Board review, Sri Lanka would have access to SDR 254 million (about US$347 million), bringing the total IMF financial support disbursed under the arrangement to SDR 1,524 million (about US$2.04 billion).

“Sri Lanka’s ambitious reform agenda continues to deliver commendable outcomes. The economy grew by 4.8 percent y/y in 2025H1 and we expect growth to remain solid in 2025. Inflation has returned to positive territory and in September prices rose by 1.5 percent y/y. Gross official reserves reached US$6.1 billion at end-September 2025. Fiscal performance in 2025H1 has been strong, primarily supported by taxes on motor vehicle imports. Debt restructuring is nearing completion.

“Program performance is strong, underpinned by good fiscal revenue outcomes and improvements in external resilience. The reform momentum should be sustained to safeguard macroeconomic stability and enhance Sri Lanka’s resilience to shocks. This is particularly important given heightened downside risks to the economy from persistent trade policy uncertainty and geopolitical tensions.

“The 2026 Budget should be in line with program parameters to continue building fiscal space on the back of strong revenue measures and prudent spending execution. This requires sustained efforts to improve tax compliance, broaden the tax base, and tackle revenue leakages by strengthening the tax exemption frameworks. Enhancing public financial management, avoiding the reemergence of expenditure arrears, and promoting high-quality and efficient public expenditure, including by addressing capital spending under-execution, will contribute to safeguarding fiscal discipline and transparency.

“At the same time, it is instrumental to maintain cost-recovery energy pricing, strengthen the governance of state-owned enterprises (SOEs), and resolve their legacy debts to ensure financial viability and minimize fiscal risks. Upcoming bills on public-private partnerships, SOEs, public procurement, and public asset management should be consistent with the Public Financial Management Act and best practices.

“Protecting the poor and vulnerable should remain a priority. There is scope to strengthen the design of the welfare benefit payment scheme to improve the targeting, adequacy, and coverage of social spending.

“Accelerating the finalization of bilateral debt agreements with the remaining official and commercial creditors is key to restoring debt sustainability and improving investor confidence. A swift operationalization of the Public Debt Management Office will be a key step towards prudent debt management practices.

“It is important for monetary policy to remain data-driven and to ensure price stability. Central bank independence should continue to be safeguarded, including by continuing to refrain from monetary financing of the budget. Efforts should continue to rebuild external buffers through reserve accumulation to adequate levels, while allowing for exchange rate flexibility. Resolving non-performing loans, strengthening governance and oversight of state-owned banks, and improving the insolvency and resolution frameworks are important to foster credit growth and safeguard financial sector stability.

“It is crucial to speed up the implementation of governance reforms outlined in the government’s action plan. Advancing procurement reforms, strengthening the AML/CFT framework, prioritizing anti-corruption measures in revenue administration, including digitalization, and implementation of electronic asset declarations will contribute to reducing corruption vulnerabilities. Recruitment at the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) should be accelerated and CIABOC’s independence safeguarded in line with the Anti-Corruption Act. Structural reforms will be key to lifting Sri Lanka’s potential growth.

“The IMF team held meetings with President and Finance Minister Anura Kumara Dissanayake, Prime Minister Dr. Harini Amarasuriya, Labor Minister and Deputy Minister of Economic Development Prof. Anil Jayantha Fernando, Minister of Industry Sunil Handunnetti, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Secretary to the Treasury Dr. Harshana Suriyapperuma, Senior Economic Advisor to the President Duminda Hulangamuwa, Chief Advisor to the President on Digital Economy Dr. Hans Wijayasuriya, Governor of Central Province Prof. Sarath Abayakon, and other senior government and CBSL officials. The IMF team also met with parliamentarians, representatives from the private sector, civil society organizations, and development partners.

“We would like to thank the authorities for the excellent collaboration during the mission, including while visiting the Central and Uva provinces. We reaffirm our commitment to support Sri Lanka achieve strong, sustainable growth.”

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Developing the human resources needed for construction projects remains a key challenge before us – PM

Published

8 hours ago

2026/06/20

Priyan

Prime Minister Dr. Harini Amarasuriya stated that the Government has already allocated substantial funds for future development activities, including the restoration of areas damaged by the recent cyclone Ditwah, and that one of the key challenges currently faced is securing the necessary human resources, particularly technical personnel, required to carry out the construction and development projects.

The Prime Minister made these remarks on Friday [June 19] in Kandy while paying a visit on the Mahanayaka Theros of the Malwathu and Asgiri Chapters.

During her visit to the Malwathu Maha Viharaya in Kandy, the Prime Minister met with the Most Venerable Thibbatuwawe Sri Siddhartha Sumangala Mahanayaka Thero, Mahanayaka of the Malwathu Chapter, as well as the Anunayaka Theros of the Chapter, the Most Venerable Niyangoda Vijithasiri Thero and the Most Venerable Dimbulkumbure Wimaladhamma Thero. The Prime Minister also engaged in a discussion with the Mahanayaka Thero.

Subsequently, the Prime Minister paid a visit to the Most Venerable Warakagoda Gnanarathana Mahanayaka Thero, Mahanayaka of the Asgiri Chapter of the Siam Maha Nikaya of Sri Lanka, and the Anunayaka of the Asgiri Chapter, the Most Venerable Narampanawa Ananda Thero.

During the discussions, the Prime Minister briefed the Mahanayaka Thero on the current progress of the new education reforms. She also stated that measures would be taken to recruit teachers in the near future to address the existing teacher shortage. She further noted that the evaluation of answer scripts from the recently held teacher recruitment examination is currently underway and that successful candidates will be recruited expeditiously following a practical assessment.

The occasion was attended by the Members of Parliament, the Secretary to the Ministry of Education, Higher Education and Vocational Education, Nalaka Kaluwewa, and several other officials.

[Prime Minister’s Media Division]

News

Children should gain experience through activities such as aesthetics and sports from the primary education stage – PM

Published

10 hours ago

2026/06/20

Priyan

Minister of Education, Higher Education and Vocational Education, Prime Minister Dr. Harini Amarasuriya, stated that if Sri Lanka is to nurture the future leaders, children must be exposed from the primary education itself to the experiences and values gained through fields such as aesthetics and sports.

The Prime Minister made these remarks while participating in the “Punchi Hapannu 2026” occasion to recognize and appreciate the winners of the Primary Literary Skills, held on Thursday [8 June]at Polpithigama National School during an educational inspection tour in the Kurunegala District.

The event was organized to recognize the winners of the “Punchi Hapannu 2026” Language and Literary Skills Competition, which was conducted with the participation of students from 49 primary schools in the Polpithigama Education Division, based on a concept initiated by the Divisional Director of Education. The occasion was further featured by aesthetic performances presented by students who had won across 17 different competition categories.

During the event, certificates were awarded to the winners by the Prime Minister.

Addressing the occasion, the Prime Minister further stated:

“The initiative undertaken within the Polpithigama Education Division is an example for the entire country. Primary education is a broad and multifaceted field. The foundation provided through primary education is important in guiding a child along the right path. A child has only one opportunity in life to experience primary education, and it is our responsibility to ensure that this opportunity is provided in the most appropriate way.

Today, we witnessed how effectively the children of the Polpithigama Education Division utilized the opportunity given to them to creatively showcase their aesthetic talents. Likewise, we are striving to build an education system that provides opportunities for children across Sri Lanka to develop their hidden talents”.

Following the ceremony, the Prime Minister visited Makulpotha Maha Vidyalaya in the Polpithigama Education Division and layed the foundation-stone for a new two-storey school building.

The construction project, implemented with an investment of Rs. 45 million, is scheduled to be completed in 2026 and handed over for students in January 2027.

The event was graced by the presence of members of the Maha Sangha, and attended by the Deputy Minister of Agriculture and Livestock Namal Karunaratne, Kurunegala District Member of Parliament Attorney-at-Law Geetha Herath, education officials of the North Western Province, parents, principals, and several other invitees.

[Prime Minister’s Media Division]

News

Inaugural session of Sirimavo Bandaranaike Vidyalaya Student Parliament held at the Presidential Secretariat

Published

10 hours ago

2026/06/20

Priyan

The inaugural session of the Student Parliament of Sirimavo Bandaranaike Vidyalaya, Colombo, was held on Friday (19) morning at the Old Parliament Chamber of the Presidential Secretariat.

The event was organised under the ‘Vision’ programme series, a joint initiative of the Presidential Secretariat, the Ministry of Education and the Department of Communication of the Parliament of Sri Lanka. Sirimavo Bandaranaike Vidyalaya was selected to participate in this programme as part of the initiative.

During the event, Deputy Chairperson of Committees of the Parliament of Sri Lanka, Hemali Weerasekara, addressed the students on leadership, personality development and parliamentary traditions.

Senior Additional Secretary to the President, Roshan Gamage, explained the role of the President’s Fund and highlighted the programmes implemented for the benefit of school students.

Senior Presidential Adviser on Science and Technology, Professor Gomika Udugamasooriya, emphasised that life’s challenges can be overcome by critically examining every experience. He also highlighted the importance of encouraging children, from their school years onward, to explore diverse fields beyond a single subject area and to develop an innovative mindset through experimentation and discovery.

Among those present were Director General of Public Relations to the President, Dharmasiri Gamage, Director (Communications) of the Parliament of Sri Lanka, Samantha Mallawarachchi, Deputy Director (Administration) of the Parliament of Sri Lanka, Chintha Madhubhashini, Director of the Tri-Forces Coordination Unit at the Presidential Secretariat, Air Commodore Asiri Gallage; Assistant Director Lieutenant Colonel Nadeeka Dangolla; Principal of Sirimavo Bandaranaike Vidyalaya, Dr. Sumedha Jayaweera; Principal of Ananda College, Colombo, D. M. Lal Dissanayake; as well as teachers, parents and students.

(PMD)