The International Monetary Fund (IMF) has called on Sri Lanka to maintain prudent economic policies and accelerate structural reforms amid risks from the Middle East war, global trade policy uncertainty and El Niño.

An IMF team led by Evan Papageorgiou visited Sri Lanka from 10 to 23 September to review economic developments and progress under the Extended Fund Facility programme.

The IMF noted that Sri Lanka’s economy grew 4.2% in the second quarter of 2026, while inflation rose to 8% year-on-year in August.

Gross official reserves increased to US$6.9 billion by the end of August, while banks remained well capitalised and profitable, and debt restructuring was largely completed.