The International Monetary Fund (IMF) staff has highlighted the challenges ahead for Sri Lanka's economic recovery, indicating that while there are early signs of stabilization, a full recovery is not yet guaranteed.

Sri Lanka's growth momentum remains subdued, with a significant contraction of 3.1% in real GDP during the second quarter compared to the previous year. High-frequency economic indicators also continue to provide mixed signals.

Additionally, Sri Lanka's reserve accumulation has slowed in recent months, raising concerns about the country's external financial stability.

Peter Breuer, IMF Senior Mission Chief, emphasized that there is no fixed timeline for the disbursement of the second tranche of the IMF's Extended Fund Facility (EFF) to Sri Lanka. He stressed that two critical factors must be satisfied: implementing necessary policies and reforms to ensure economic stability and growth.