The International Monetary Fund (IMF) says Sri Lanka’s economic reform programme has made “very significant progress,” with strong growth, low inflation and improving external indicators, despite recent shocks.

Speaking at a press briefing on March 19, IMF Communications Director Julie Kozack noted that the programme has remained on track even after the impact of Cyclone Ditwah, highlighting the resilience of the Sri Lankan people.

She said Sri Lanka’s economy grew by around 5% in 2025, while inflation stood at about 1.6% in February, reflecting stabilising macroeconomic conditions. Kozack also pointed out that the country’s debt restructuring process is nearly complete and that gross international reserves have been rising significantly.

However, she cautioned that Sri Lanka remains vulnerable to external shocks, particularly due to the ongoing tensions in the Middle East. The country is exposed through key channels such as trade, worker remittances and tourism, which could weigh on the economic outlook.

Looking ahead, Kozack confirmed that an IMF staff team is expected to visit Sri Lanka from March 26 to April 9 to hold discussions on economic policies. The mission aims to complete a combined Fifth and Sixth Review under the Extended Fund Facility programme.

During the visit, IMF officials will also engage with Sri Lankan authorities to assess the potential economic impact of the Middle East conflict. The findings are expected to inform the IMF’s updated assessment of Sri Lanka’s economic trajectory and future support.

The IMF reiterated its commitment to continue supporting Sri Lanka as it advances its reform agenda and navigates external risks.