IMF Official Notes Sri Lanka's Economic Stability Amidst Middle East Conflict Risks

Colombo. A senior official from the International Monetary Fund (IMF) stated that although Sri Lanka's economy is currently stable, the ongoing conflict in the Middle East could potentially impact trade, remittances from foreign employment, and the tourism sector.

Speaking at a press conference on Friday, Julie Kozack, Director of the IMF's Communications Department, noted that Sri Lanka's reform program has shown remarkable progress despite the impact of Cyclone Doksuri. According to her, Sri Lanka's economy grew by 5 percent in 2025, and inflation was approximately 1.6 percent in February 2026.

Furthermore, she informed that the country's debt restructuring is nearly complete and foreign exchange reserves have increased significantly. She announced that a team will visit Sri Lanka from March 12 to Chaitra 26 to discuss economic policies. The purpose of this visit is to complete the fifth and sixth reviews under the Extended Fund Facility program.

Additionally, it was stated that the team will meet with Sri Lankan officials to gather more information on the potential economic impact of the Middle East conflict and present an updated assessment on how future assistance will continue.