President Anura Kumara Dissanayake signals openness to a fresh IMF arrangement focused on growth after the current programme restored macroeconomic stability, while outlining reforms to attract investment and tackle rural poverty.

Sri Lankan President Anura Kumara Dissanayake has declared that his government is prepared to enter a new agreement with the International Monetary Fund if it supports sustained economic growth while safeguarding hard-won stability. Speaking at the Sri Lanka Economic and Investment Summit organised by the Ceylon Chamber of Commerce, he said the primary goal of the existing four-year Extended Fund Facility had been achieved and the next phase must prioritise expansion.

The summit, held under the theme “Positioning Sri Lanka in a Changing Global Economy: Resilience, Reforms, and the Future of Economic Policy,” brought together policymakers, business leaders and international investors. Dissanayake used the platform to outline a roadmap spanning rural development, infrastructure, energy, tourism and digital skills, while stressing that any future IMF engagement would be judged by its contribution to growth without reversing stabilisation gains.

From Crisis Recovery to Growth Ambitions

Sri Lanka’s current IMF programme, approved in March 2023 with financing of about $3 billion, helped the country exit its deepest economic crisis in decades. After a 7.3 per cent contraction in 2022, the economy has posted consecutive years of growth, with real GDP expanding around 5 per cent in 2024 and 2025 and further quarterly gains in 2026. Reserves have risen, debt restructuring is largely complete, and the World Bank has restored upper-middle-income status.

Dissanayake noted that stability has been secured. “The primary goal of the initial four-year Extended Fund Facility programme held with the IMF was achieving economic stability. That stability has been successfully achieved, and the next step is achieving economic growth while protecting that stability. If we can enter into a new agreement for that growth, we are ready to go,” he said.

IMF officials have echoed the positive assessment. Deputy Director of the Asia and Pacific Department Sonali Jain-Chandra stated that the Fund stands ready to support Sri Lanka “in any way they desired, as appropriate,” highlighting strong fiscal performance and structural improvements, including in governance. A staff-level agreement on the seventh review under the current facility is expected to unlock roughly $345 million once the Executive Board approves it, with another review planned before the programme expires in March 2027.

Discussions on post-programme options are already under way. Officials have indicated a shift from crisis-driven support towards a more sustainable, growth-oriented engagement, though no final decision has been taken. Sri Lanka has sought IMF assistance on 17 previous occasions since joining the institution.

Tackling Rural Poverty and Expanding Opportunities

A central challenge remains rural poverty, which a recent World Bank report placed at 16.9 per cent. Nearly five million people receive Aswesuma benefits, the government’s main social safety net. Dissanayake acknowledged that not everyone can immediately join the economic mainstream and that a vulnerable group will always require support. The larger problem, he said, is the limited economic opportunities available in rural areas – largely confined to subsistence agriculture, fishing or small retail.

The government has launched a collateral-free loan scheme that has already disbursed nearly 18 billion rupees to rural entrepreneurs. Budget allocations this year direct almost 100 billion rupees toward rural priorities, including 35 billion for small tanks and canals, 25 billion for the Prajasakthi rural programme and 24 billion for rural roads. The 2027 budget will emphasise faster communications and better road links between villages and cities so that people can remain in their communities while accessing markets and services.

These measures form part of a longer-term strategy rather than a quick fix. “This cannot be completed in a year or two like building a building or constructing a road. A programme with a targeted, continuous plan is required,” the President said. Broader recovery indicators show poverty has eased from its crisis peak but remains above pre-2019 levels, underscoring the need for inclusive growth.

Speeding Approvals and Overhauling Laws

Capital expenditure is set to rise sharply to 2 trillion rupees in the coming budget. Execution rates have improved – from 64 per cent in 2023 and 54 per cent in 2024 to 76 per cent in 2025 despite elections and disasters – but bottlenecks persist. Outdated procurement rules designed mainly for buying goods struggle with modern purchases such as software solutions or promotional campaigns. The government plans new procedures for specialised fields, early tendering once the Treasury certifies funds, e-procurement and special salary scales to retain skilled public servants.

Key legislation is advancing. The State-Owned Enterprises management law is expected to reach the Cabinet within two weeks. The public-private partnership law has been prepared by the Legal Draftsman’s Department and sent to the Attorney General. Labour laws, currently scattered across about 12 acts, will be reviewed, and amendments to the Customs Ordinance have reached broad agreement after long consultations with the Chamber of Commerce and Customs officials. Most of these measures are expected to pass Parliament in January or February.

Unlocking Ports, Energy and Tourism Potential

One of the most concrete signals of private-sector openness concerns Colombo Port’s East Container Terminal. Currently handling about 500,000 containers against a capacity of 3.2 million, the facility is underutilised. Dissanayake said the Ports Authority alone cannot maximise its potential and indicated openness to private management while retaining state ownership. A related $1.4 billion breakwater investment to support West Container Terminal II has also been flagged.

In energy, the government prioritises both reliability and lower costs. Competitive tenders have already delivered solar power at 3.74 to 3.96 US cents per unit, far below earlier feed-in tariffs. Solar capacity has expanded rapidly, with 1,500 new megawatts added in two years and agreements for another 1,100 megawatts. Floating solar projects on reservoirs such as Ibbankaduwa, Randenigala and others aim to conserve scarce land. Private investment is being invited for selected high-voltage transmission lines.

Tourism promotion has been hampered by rigid procurement rules that struggle to “buy an idea.” The Tourism Authority plans tenders in January and is running pilot campaigns in five countries. A performance-based incentive is under consideration: operators who exceed this year’s tourist numbers could receive budget support for the excess arrivals.

Building Skills and Digital Capacity

Looking ahead, the government is preparing a Cabinet paper for an artificial intelligence centre in Wijerama in collaboration with Singapore, expected this week. Expanding business-process outsourcing and online work opportunities is another priority to create international linkages and higher-value employment.

These steps come as Sri Lanka seeks to convert stability into durable competitiveness. The Ceylon Chamber of Commerce has urged both public and private leaders to become “reform champions.” International partners, including the Asian Development Bank, continue to support skills development and infrastructure that can broaden the recovery’s benefits.

Dissanayake’s message to investors was clear: transparent rules, infrastructure development and policy predictability will underpin the next phase. Whether that phase includes a formal new IMF arrangement will depend on negotiations that balance growth ambitions with the preservation of fiscal and external buffers. For a country that has already defied expectations by stabilising after default, the test now is whether reforms can deliver inclusive expansion that reaches the rural majority and attracts the sustained capital needed for long-term transformation.