The International Monetary Fund (IMF) has completed the fourth review of Sri Lanka’s $2.9 billion bailout programme, enabling the release of a $350 million tranche under the four-year Extended Fund Facility (EFF). Originally approved in March 2023, the IMF programme was designed to support Sri Lanka in restoring macroeconomic stability and achieving fiscal and debt sustainability amid its severe economic crisis.

According to the IMF, this latest disbursement of SDR254 million (approximately $350 million) brings the total amount provided to Sri Lanka under the facility to SDR1.27 billion (around $1.74 billion). The programme has played a crucial role in rebuilding the country’s foreign reserves and facilitating debt restructuring talks with external creditors.

However, the economic reforms mandated by the IMF have resulted in significant public hardship. While these measures were considered necessary by the IMF to promote long-term growth and stability, they have been widely unpopular and contributed to a change in government in 2024. Despite previously criticizing the IMF’s conditions, the new administration led by the National People’s Power has chosen to stay aligned with the programme’s implementation.