IMF Approves Third Review of Sri Lanka Bailout

The International Monetary Fund (IMF) approved the third review of Sri Lanka's $2.9 billion bailout, releasing approximately $333 million, which brings total funding to about $1.3 billion. While signs of economic recovery are emerging, the IMF cautioned that the economy remains vulnerable, emphasizing the need for the country to complete vital debt restructuring with bondholders and bilateral creditors. Sri Lanka's authorities are expected to present an interim budget in December, aiming to conclude debt restructuring by the end of that month. The IMF stated that successful implementation of prior actions, including a consistent 2025 budget, is essential for the next tranche of funding. Recent indicators show a 4% year-on-year economic growth and inflation has decreased, signaling potential stabilization. However, continued reforms and adherence to fiscal targets will be crucial for sustainable recovery.