President Anura Kumara Dissanayake says Sri Lanka has made significant progress in stabilising its economy under the current International Monetary Fund (IMF) Extended Fund Facility programme, but maintaining that stability while achieving stronger economic growth remains the country’s next major challenge.
Addressing Sri Lanka’s future engagement with the IMF, the President said the primary objective of the current four-year programme was to restore macroeconomic stability following the country’s economic crisis.
He noted that considerable progress had been made, pointing to improvements in credit ratings and broader economic indicators. However, he stressed that further improvements were needed, particularly in strengthening foreign reserves.
“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.
The President also warned that growing uncertainty in the global economy remains a major concern, highlighting the country’s vulnerability to external shocks.
As an example, he pointed to the sharp increase in fuel import expenditure. According to Dissanayake, Sri Lanka spent approximately US$4.442 billion on fuel imports in 2025, while expenditure had already reached US$4.482 billion by August this year.
He warned that if the trend continues, the annual fuel import bill could rise to nearly US$6 billion, raising concerns about the economy’s capacity to absorb such costs.
“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.
The President revealed that the Government is discussing possible options for its future engagement with the IMF after the current arrangement concludes.
He said the Government had reviewed its policy objectives since assuming office and assessed whether commitments under the existing programme had restricted the implementation of its key priorities.
According to Dissanayake, only a limited number of policy objectives had been constrained by the agreement, allowing the Government to continue with the programme without major disagreements.
He noted that many IMF-supported programmes in other countries had broken down before completion, while Sri Lanka’s arrangement had continued without significant conflict between the Government and the Fund.
The President said officials from the Ministry of Finance, the Central Bank and a team of economic advisers are currently examining various options and assessing the country’s economic outlook before a final decision is made.
With six to seven months remaining under the current arrangement, he said the Government had not ruled out either continuing with an IMF programme or pursuing an alternative approach.
“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.
Dissanayake added that policymakers are assessing the economy’s ability to withstand domestic and external shocks before determining the most suitable course of action.
While the country may now be better positioned to manage domestic pressures, he said the scale and potential impact of external shocks remain uncertain amid increasing global economic volatility.
The President said the Government would consider a future IMF arrangement based on its assessment of these risks and forecasts of the country’s economic outlook.
