Dawn
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11:36 Apr 09, 2026
The International Monetary Fund (IMF) reached a staff-level pact with Sri Lanka, which will unlock financing of about $700 million once approved, the lender said on Thursday, calling for reforms, including in fuel levies, to ensure stability and growth. The deal comes as the island nation recovers from its worst economic crisis in decades, which led to a foreign debt default in 2022 and a $2.9-billion IMF bailout programme. Sri Lanka’s economic reforms have supported the recovery, but it has been significantly exposed to the Iran war and needs to “build back better” after Cyclone Ditwah, the IMF added. The Middle East conflict caused a surge in energy prices, disrupted a key air hub for tourists, and affected Sri Lankans working in the region, said Evan Papageorgiou, the IMF’s mission chief for Sri Lanka. “The staff-level agreement will go before the IMF executive board at the end of May or early April,” he added. Sri Lanka will need to raise power tariffs further and carefully manage its finances to navigate...