The International Monetary Fund (IMF) has urged Sri Lanka to stay committed to its reform agenda as the country faces renewed risks from global energy market volatility.

Speaking during the IMF Spring Meetings 2026 press briefing, Krishna Srinivasan, Director of the Asia and Pacific Department, IMF said that while Sri Lanka has made notable progress in stabilising its economy, continued reforms are essential to secure long-term growth and resilience.

He noted that Sri Lanka, like many economies in the region, remains vulnerable to external shocks due to its reliance on energy imports. Rising global oil and gas prices could therefore pose renewed challenges to the country’s recovery.

However, Srinivasan highlighted that Sri Lanka is now in a stronger position compared to the height of its economic crisis, having significantly improved its fiscal performance over the past three years. Government revenue as a share of GDP has increased substantially, helping rebuild fiscal buffers.

This improvement, he said, allows the government to provide support to those most affected by rising energy costs. Nevertheless, he stressed that such measures must remain “targeted and temporary” to ensure efficient use of limited fiscal space.

The IMF also underscored the importance of avoiding policy slippages, warning that any deviation from the reform path could undermine the country’s recovery, despite ongoing progress in debt restructuring and improving macroeconomic indicators.

Sri Lanka is nearing the completion of its sovereign debt restructuring but remains one of the most highly indebted economies in the region, leaving it exposed to both domestic and external risks.

The IMF reiterated that maintaining reform momentum, while protecting the poor and vulnerable through carefully designed support measures, will be critical to achieving sustainable, inclusive, and balanced economic growth in the period ahead.