The International Monetary Fund (IMF) confirmed ongoing discussions with Sri Lanka’s newly elected government as part of the nation’s ongoing economic recovery efforts. During a press briefing held on October 3, 2024, IMF Spokesperson Julie Kozack outlined the organization's latest interactions with Sri Lanka, emphasizing the need for continued reforms to maintain economic progress.

Following the election of President Dissanayake and the upcoming parliamentary elections on November 14, questions have arisen about the future of Sri Lanka’s current economic program under the IMF's Extended Fund Facility (EFF). While one political faction supports sticking with the current program, another faction is calling for changes. Kozack noted that the IMF's high-level delegation, led by Asia Pacific Department Director Krishna Srinivasan, is currently in Colombo to meet with the President and his economic team to discuss these developments.

“Program performance is strong, and reform efforts are bearing fruit in terms of reviving economic growth, lowering inflation, boosting reserves, and improving revenue mobilization,” Kozack stated. However, she acknowledged ongoing vulnerabilities and uncertainties, stressing the importance of maintaining reform momentum.

The delegation is expected to announce dates for the third review of the EFF program in due course. The second review, concluded in June 2024, provided Sri Lanka with immediate access to $336 million to support its reform agenda.

On the debt restructuring front, Kozack confirmed significant progress in negotiations with international bondholders. On September 18, 2024, Sri Lanka reached an agreement in principle with bondholder representatives, pending the confirmation of comparability of treatment by Sri Lanka's Official Creditor Committee (OCC).

The IMF remains closely engaged with Sri Lanka’s government, aiming to guide the country through its recovery while balancing the demands of economic reform and political developments.