Sri Lanka Secures $334 Million from IMF as Third Review of Extended Fund Facility Concludes
The International Monetary Fund (IMF) has successfully completed the third review of Sri Lanka’s $2.9 billion Extended Fund Facility (EFF) program, unlocking an additional $334 million for immediate disbursement. This brings the total financial assistance received by Sri Lanka under the EFF to approximately $1.34 billion.
Economic Recovery and Key Achievements
Sri Lanka has made significant progress under the IMF-backed reform agenda, with all key quantitative targets for end-December 2024 being met, except for the indicative target on social spending. The IMF also acknowledged the successful completion of a bond exchange, a major milestone in Sri Lanka’s journey toward restoring debt sustainability.
According to IMF Deputy Managing Director Kenji Okamura, Sri Lanka’s economic recovery has been remarkable, with inflation declining, revenue collection improving, and foreign reserves strengthening. The economy grew by an average of 4.3% since Q3 2023, and real GDP by the end of 2024 has recovered 40% of the losses incurred between 2018 and 2023.
Challenges and Future Outlook
Despite notable progress, the IMF warns that Sri Lanka’s economy remains vulnerable, emphasizing the need for sustained fiscal discipline, structural reforms, and governance improvements. Continued efforts are crucial to maintaining macroeconomic stability and long-term debt sustainability.
The EFF program, initiated in March 2023, supports Sri Lanka’s efforts to:
- Restore macroeconomic stability
- Ensure debt sustainability
- Protect vulnerable communities
- Strengthen foreign reserves
- Implement governance and structural reforms
With the third review now complete, the Sri Lankan government is expected to maintain the reform momentum, ensuring continued economic stability and resilience in the face of future challenges.
For the full IMF report, visit IMF Official Release.
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