Sri Lanka: Third Review Under the Extended Arrangement Under the Extended Fund Facility, Financing Assurances Review, and Monetary Policy Consultation Clause-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka

Sri Lanka underwent a political transition with presidential and parliamentary elections in late 2024. The new authorities expressed commitment to the program. Reform efforts are bearing fruit with growth recovering, low inflation, increased revenue collection, and reserves accumulation. By end-2024, Sri Lanka’s real GDP is projected to have recovered about 40 percent of its loss incurred between 2018 and 2023. Nevertheless, the economy is still vulnerable, and restoration of debt and external sustainability depends on continued implementation of reforms.