The International Monetary Fund has granted USD 695 million in aid to Sri Lanka, aiming to bolster recovery efforts as the country faces significant challenges post-Cyclone Ditwah and due to unrest in the Middle East.
This funding approval came after a review of Sri Lanka’s economic reforms, which are part of a 48-month Extended Fund Facility valued at approximately USD 2.4 billion. According to Kenji Okamura, Deputy Managing Director of the IMF, despite difficult circumstances, Sri Lanka has shown strong adherence to the program.
Okamura highlighted how the ongoing US-Iran conflict has severely impacted the economic forecast, with growth expectations dwindling to 3% by 2026. The scenario prompts necessary fiscal easing through a relief package, while the government focuses on rebuilding efforts post-cyclone.
IMF underscores the need for continuous reforms, particularly in public finance, investment management, and the electricity sector, alongside implementing a revenue mobilization strategy for sustainable improvement.
(With inputs from agencies.)