IMF Reviewing 2026 Budget; $347 Mn Tranche Decision Soon 📈

• The IMF is currently reviewing Sri Lanka's 2026 Budget, which, along with the Fifth Review under the EFF, will be considered by the Executive Board in the coming weeks. • Crucially, Board approval will unlock $347 million in financing (the Fifth Tranche). A staff-level agreement was already reached on 9 October. • IMF Director of Communications Julie Kozack stressed the need for continued structural reforms to strengthen the growth outlook. Key areas include: • Trade liberalisation and streamlined regulation for Foreign Direct Investment (FDI). • Accelerated governance reforms. • Strengthening social protection; "continuing to protect the vulnerable" must remain a priority. • The IMF is assessing if the fiscal framework in the Budget aligns with commitments under the existing program. • Separately, Fitch noted the 2026 Budget keeps the country on its fiscal reform trajectory, but cited potential risks from slower revenue growth and post-IMF debt.