IPS urges continued IMF engagement beyond 2027 to counter debt overhang
Summarised by AI from 1 article
The Institute of Policy Studies (IPS) has recommended that Sri Lanka maintain engagement with the International Monetary Fund beyond March 2027, when the current Extended Fund Facility program ends.
In its Sri Lanka State of the Economy 2026 report released in early October, the think tank warned that the country faces a prolonged debt overhang of elevated borrowing costs and limited market access.
The IPS suggested a precautionary relationship or successor arrangement to serve as a credibility anchor, sustain policy discipline, and lower sovereign risk premia while structural reforms take root.
It also cautioned against premature commercial external borrowing, warning that sub-investment-grade ratings and external shocks could heighten rollover risks before reserve buffers and export earnings are sufficiently strengthened.
Read the original reports
How the story developed
- EසිThe President specified the IMF programme concludes in March 2027 and detailed the committee's composition.
- தPresident Dissanayake announced the IMF programme's conclusion and appointed a committee to evaluate future options.
- EGovernment officials debated whether to pursue a successor program or exit the IMF arrangement.
- EThis storyThe Institute of Policy Studies recommended continued IMF engagement to manage the national debt overhang.
