Sri Lanka to Combine 5th & 6th IMF Reviews, Targeting Board Approval in May

COLOMBO (News 1st); Sri Lanka aims to combine the fifth and sixth reviews of its IMF programme and seek Executive Board approval “most probably somewhere in May,” Central Bank Governor Dr. P. Nandalal Weerasinghe said, noting the fifth review, initially slated for December, was postponed due to the economic impact of Cyclone Ditwah.

He said the combined approval would help the country “catch up the time and get the disbursement,” adding that the IMF facility remains a key pillar of economic stability and growth moving forward.

Responding to a question on whether the IMF programme would need revision because of the conflict in Iran, Dr. Weerasinghe said the programme has sufficient flexibility to adjust to current circumstances and the changed outlook since December.

He identified two key shifts guiding discussions with the IMF: the domestic impact of the cyclone and the global impact on external demand. According to him, authorities are in the process of negotiating revised targets, with an IMF mission expected in Sri Lanka at the end of this month to help complete both reviews together, enabling the programme to continue with appropriate flexibility.

Addressing current macroeconomic risks, Dr. Weerasinghe said growth is not a concern, noting the economy has reached around 5% growth, better than earlier expectations near 3%, and expressing confidence that growth close to 5% is achievable this year as well.

He underscored, however, that the biggest worry is the duration of the Middle East conflict, which could significantly affect the global economy and Sri Lanka through supply-chain rerouting, trade, and market access. He said Sri Lanka hopes for a shorter conflict period to ease pressures and support continued recovery.

The governor made this statement in an exclusive with Bloomberg on the sidelines of 'IMF Conference; Asia 2050'  with Haslinda Amin.