With increasing tariffs, ongoing developments in the Middle East, and uncertainty surrounding energy prices, Sri Lanka cannot afford policy mistakes, according to a stark warning by Dr Gita Gopinath, First Deputy Managing Director (FDMD) of the IMF.

Dr Gopinath stressed that a sound fiscal policy is essential to avoid a return to crisis.

Speaking at the conference on ‘Sri Lanka’s Road to Recovery: Debt and Governance’ — co-hosted by the Ministry of Finance, the Central Bank of Sri Lanka, and the IMF — Dr Gopinath assured that the IMF stands ready to be a steadfast partner in helping improve the lives of all Sri Lankans.

While noting that Sri Lanka had previously engaged in 16 IMF programs, Dr Gopinath said it was crucial for all stakeholders to collaborate to make the current IMF arrangement its last. The IMF is confident this can be a reality if the country maintains its policy discipline and sticks to its reform path.

President Anura Kumara Dissanayake, addressing the conference, also stressed his aim for the current Extended Fund Facility (EFF) to be the last IMF program for Sri Lanka. He further explained that by 2028, the country expects to achieve sufficient economic growth and stability to enable it to service its debts without further assistance.