Colombo, Apr 12 (UNI) Sri Lanka and the International Monetary Fund (IMF) have agreed to continue discussions to conclude a staff level agreement later, following the uncertain trajectory of the international economy triggered by the US trade tariffs.
“The recent external shock and evolving developments are creating uncertainty for the Sri Lankan economy, which is still recovering from its own economic crisis,” an IMF visiting team said in an end of mission statement, as per Economy Next.
An IMF team led by Evan Papageorgiou visited Colombo from April 3 to 11.
“More time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program.”
Sri Lanka, which had almost gone completely bankrupt in 2022 had bounced back since 2023 after India extended it a $4 billion Line of Credit, making Colombo eligible for securing a $2.9 billion bailout package from the global money lender in the form of a four-year Extended Fund Facility in March 2023. Colombo currently needs to complete an IMF executive board approval to receive about $334 million as the next tranche of its facility.
However, the new 44% tariff duty imposed on the country by US President Donald Trump as part of his global trade tariffs has made the economic situation uncertain.
In its statement, the IMF said: “Sri Lanka’s ambitious reform agenda supported by the IMF Extended Fund Facility (EFF) continues to deliver commendable outcomes. The post-crisis growth rebound of 5 percent in 2024 is impressive. Inflation declined considerably in recent quarters and has fallen to ‑2.6 percent at end-March 2025. Gross official reserves increased to US$6.5 billion at end-March 2025 with sizeable foreign exchange purchases by the central bank. Substantial fiscal reforms have strengthened public finances.
“The recent external shock and evolving developments are creating uncertainty for the Sri Lankan economy, which is still recovering from its own economic crisis. More time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program.”
With a 90-day global pause on the tariffs, Sri Lankan President Anura Kumara Dissanayake said that his government is in talks with Washington to reduce the tariffs and strengthen trade relations, while his cabinet continues to mull over initiatives that the island country should undertake to achieve their target.

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