FX.co ★ IMF, Sri Lanka in Ongoing Talks Over $2.9 Billion Deal

The International Monetary Fund (IMF) announced on Friday that it is collaborating with Sri Lanka to finalize the fourth review of its $2.9 billion loan agreement, following a recent evaluation visit by an IMF team. The organization praised Sri Lanka's reform initiatives for delivering "commendable outcomes," referencing anticipated economic growth of 5% in 2024, a consumer price decline of 2.6% in March 2025, and an increase in official reserves to $6.5 billion. Nonetheless, the IMF cautioned that recent external shocks and heightened global uncertainty could impede recovery efforts. It underscored the necessity of maintaining reform momentum, enhancing tax compliance, avoiding new tax exemptions, and reinstating cost-recovery electricity pricing. Additionally, the IMF urged better-targeted social spending to support vulnerable populations and recommended prudent budget execution to safeguard the limited fiscal space.