Sri Lanka faces growing criticism over IMF reliance as leaders warn of rising living costs, reduced welfare, and worsening socio-economic conditions.
Newsroom (01/06/2026 Gaudium Press ) Sri Lanka’s continued reliance on International Monetary Fund (IMF) assistance has drawn sharp criticism from religious leaders, opposition politicians, and economic experts, who warn that the country’s recovery strategy is worsening the socio-economic burden on ordinary citizens.
At a press conference on May 31, Cardinal Malcolm Ranjith, the Archbishop of Colombo, openly questioned the government’s dependence on IMF-led programs, arguing that such reliance undermines long-term national progress. “It is not possible to move the country forward if we act according to the IMF,” he said, stressing that institutions like the IMF give insufficient consideration to the well-being of people.
Sri Lanka is set to receive approximately US$695 million in June under the sixth and seventh tranches of its IMF Extended Fund Facility. This comes as part of a US$2.9 billion bailout agreement signed in March 2023, following the country’s worst economic crisis a year earlier.
While the IMF program has been credited with stabilizing the economy—contributing to around 5 percent economic growth, increased foreign currency reserves, and a faster recovery trajectory—critics argue these gains have come at a significant social cost.
Cardinal Ranjith emphasized that IMF-backed reforms have led to repeated increases in essential costs. Since January, the government has raised fuel prices five times and increased electricity tariffs once. These measures, he said, have deepened hardship for citizens already grappling with a high cost of living.
“The government’s reliance on IMF funds forces price hikes that worsen the suffering of the people,” he noted.
Beyond short-term economic pressures, the Cardinal also revisited the broader economic framework that has shaped Sri Lanka’s development since 1977. He criticized the country’s open economic policy, which transitioned the nation from a state-controlled system to a market-driven, export-oriented model. According to him, this shift has weakened domestic production and increased dependence on imports, leaving the country vulnerable to global economic pressures.
Despite signs of macroeconomic recovery, Sri Lanka continues to face external shocks. Ongoing conflict in the Middle East and the impact of Cyclone Ditwah, which struck the country in November, have further strained the economy and compounded difficulties for households.
Political opposition figures have echoed these concerns. Sajith Premadasa, leader of the opposition Samagi Jana Balawegaya and an economist, criticized the continuation of IMF programs without adequate social safeguards. He called for immediate “relief measures” to ease the burden on low-income and middle-class families affected by stringent economic reforms.
“The people are suffering, and reforms must be balanced with support mechanisms,” Premadasa argued.
Economic analysts at the grassroots level also report deteriorating conditions. Nissanka Samidhu, an economist affiliated with the Rural Women Empowerment Organization in Kurunegala, pointed to a dual impact: rising prices coupled with declining incomes. He added that job losses have further intensified the crisis for many families.
Social worker Nilanka Sadun warned of a deeper structural risk: the possibility of Sri Lanka becoming trapped in a recurring cycle of IMF borrowing. She highlighted that reductions or eliminations of welfare and relief programs under IMF-backed reforms have placed “additional pressure on millions of ordinary citizens.”
“The reduction or removal of welfare programs has made life even harder for vulnerable communities,” Sadun said.
The criticism comes at a politically significant moment. Sri Lanka is currently under its first left-wing government, formed after the Janatha Vimukthi Peramuna (JVP)-led coalition secured victory in the 2024 presidential election. President Anura Kumara Dissanayake had pledged to reform and revive the national economy, raising expectations for a more people-focused approach to economic management.
However, as the government continues to implement IMF-linked reforms, the growing chorus of dissent highlights a widening gap between macroeconomic recovery indicators and ground-level realities.
With rising living costs, reduced welfare support, and ongoing external shocks, Sri Lanka’s path to economic stability appears increasingly contested—raising urgent questions about how to balance fiscal reform with social protection in the years ahead.
- Raju Hasmukh with files form UCA News
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