IMF Concludes Sri Lanka Visit, Notes Central Bank Rate Hike Amid Rising Inflation and Softening Tourism

An International Monetary Fund (IMF) team concluded its visit to Sri Lanka, reporting that the Middle East war has impacted the economy. Headline inflation in Sri Lanka rose from 1.6% year-on-year in February 2026 to 5.5% in May due to energy price increases. Tourist arrivals growth softened and gross international reserves accumulation decelerated. In response, the Central Bank of Sri Lanka implemented a 100-basis point policy rate hike and deployed macroprudential measures.