Sri Lanka’s economic recovery faces fresh scrutiny this week, as the International Monetary Fund (IMF) checks whether the government has stuck to tough reform pledges under its USD 2.9 billion bailout — even after winning some breathing room following recent shocks.

A nine-member IMF team, led by Mission Chief Evan Papageorgiou, is in Colombo from 24-30 June for the seventh review of the Extended Fund Facility programme.

The talks cover emergency fiscal measures, customs reforms and a revised Medium-Term Revenue Strategy.

Officials also inspected Sri Lanka Customs to assess digitalisation efforts aimed at boosting transparency and revenue. Wellnessdestination guide

Why it matters:

The review will decide whether Sri Lanka gets its hands on the eighth tranche — roughly USD 335-350 million — strengthening the country’s fragile external finances.

The backdrop:

Sri Lanka’s outlook has darkened. The Middle East conflict and Cyclone Ditwah are pushing up inflation and fuel costs, weakening the current account and denting tourism earnings.

The IMF’s response:

Some flexibility, but with strings attached. A Rs.500 billion supplementary budget will help cyclone-hit families and rebuild damaged infrastructure.

The primary budget surplus target for 2026 has been eased — but Sri Lanka must return to 2.3% of GDP by 2027.

The Fund has been blunt: emergency spending is not a licence for fiscal indiscipline. Officials are combing through mid-year budget data to confirm spending stays within approved limits.

What to watch:

– Debt repayments – Staying current on restructuring obligations remains non-negotiable for restoring investor confidence.

– Money printing – Net monetary financing must stay at zero — no printing money to fund government spending.

– Reserves – The Central Bank must keep building reserves, even as it intervenes to prop up the rupee.

– Anti-corruption – CIABOC needs independent commissioners and proper funding for forensic investigations — still a work in progress.

– State enterprises – Loss-making SOEs remain a drag on the Treasury; the IMF wants visible progress on restructuring or divestment.

The bottom line:

The IMF has handed Colombo some short-term relief. Whether that translates into long-term funding depends on whether the government can show the reform momentum hasn’t stalled.

The Vatican has appointed the Most Rev. Anton Ranjith Pillainayagam, the Auxiliary Bishop of the Archdiocese of Colombo and Apostolic Administrator of the Diocese of Batticaloa, as the new Bishop of the Diocese of Jaffna.

The appointment has been made following the resignation of Bishop of Jaffna Rev. Dr. Justin Bernard Gnanapragasam.

The resignation of Bishop Justin Bernard Gnanapragasam has been accepted by Pope Leo XIV, according to a statement issued by the Apostolic Nunciature in Sri Lanka.

Until the new Bishop takes possession of the Office of the Diocese of Jaffna, Rev. Dr. Justin Bernard Gnanapragasam will function as the Apostolic Administrator, the statement added.

Thousands of Buddhist devotees gathered at temples and sacred sites across Sri Lanka today (29) to observe Poson Full Moon Poya, commemorating the arrival of Arahat Mahinda Thero, who introduced Buddhism to the country in the 3rd century BCE.

Religious observances, including almsgiving, devotional ceremonies and observance of Sil, were held at temples across the country, with large crowds converging on the sacred cities of Anuradhapura and Mihintale from the early hours of the day.

According to Buddhist tradition, Arahat Mahinda Thero arrived at Mihintale on a Poson Full Moon day accompanied by a group of missionaries, marking the introduction of Buddhism to Sri Lanka.

Meanwhile, the annual Deranabhiwandana Poson religious and cultural program was held throughout the day at the Ruwanweli Maha Seya in Anuradhapura, drawing devotees from across the country. The programme began at 5.45 a.m. with the observance of Sil and featured a series of religious activities.

The midday Buddha Puja was attended by devotees, including founder of the Derana Media Network and Member of Parliament Dilith Jayaweera.

The day’s religious programme concluded with a blessings ceremony and traditional oil lamp offering led by Ven. Deegala Piyadassi Thero, invoking blessings for the people of Sri Lanka.

Around 35 to 40 parties have indicated interest in the Government’s plan to secure a joint venture partner for Mattala Rajapaksa International Airport (MRIA), with the exact number to be known once formal proposals are submitted, The Daily Morning learns.

Speaking to The Daily Morning yesterday (28), Deputy Civil Aviation Minister Janitha Ruwan Kodithuwakku said the level of interest shown by prospective parties was significantly higher than during the previous Expressions of Interest (EOI) process conducted under the former Government.

“There were around 35 to 40 parties that attended the pre-brief meetings in recent months. During the last EOI process under the previous Government, only one or two parties showed interest. This time, around 40 have indicated that they are interested, although we will know the exact number once the proposals are received. The deadline for the submissions has not yet ended,” he said.

Kodithuwakku also said the Airport had undergone a significant transformation over the past year, making it far more attractive to potential investors.”When we assumed office, the MRIA had almost turned into a jungle. Elephant fences had been damaged, wildlife was moving within the airport premises and flight operations could not be carried out safely. During the past year, we completed the required renovations, established a wildlife office and obtained certification confirming that the airport is free from wildlife risks. It has now been converted into a fully operational airport,” he said.

Earlier this year, the Government invited EOIs from interested parties as part of plans to identify a joint venture partner to operate MRIA and steer the airport towards profitability. Speaking previously to The Daily Morning, Kodithuwakku said that the Airport had failed to generate the expected returns since its establishment and continued to incur annual losses of around Rs. 3 billion, roughly equivalent to its operating costs. He said that after restoring the Airport to a condition suitable for safe operations, the Government’s focus had shifted towards making the facility commercially viable. Although MRIA has the capacity to handle around one million passengers annually, he said that its highest passenger throughput was recorded only in 2025, when approximately 150,000 passengers travelled through the airport.

MRIA, located in Hambantota, has long been the subject of debate due to its low utilisation and high maintenance costs despite being built to ease congestion at Bandaranaike International Airport and promote regional development.

A high-level delegation from China’s Peking University has underscored the depth and diversity of Sri Lanka-China relations following a series of discussions with government officials, business leaders, legal experts, members of the armed forces and think tanks in Colombo, highlighting economic cooperation, cultural affinity and knowledge exchange as key pillars of the bilateral partnership.

The delegation, led by Prof. Wang Weijia, Director of the Research Centre for Global Governance and International Communication and Dean of the Institute of International Communication at Peking University, held extensive consultations on opportunities for strengthening cooperation between the two countries.

Meeting the Presidential Special Envoy on Foreign Investments and Western Province Governor Hanif Yusoof, the delegation discussed Sri Lanka’s trade and investment outlook, with logistics, energy and tourism identified as priority sectors for foreign investment. Yusoof noted that Chinese enterprises have made substantial contributions to Sri Lanka’s infrastructure, telecommunications and energy sectors and stressed the importance of leveraging the island’s strategic location to build regional supply chains and expand export-oriented manufacturing.

Secretary to the Treasury and Ministry of Finance, Planning and Economic Development Dr. Harshana Suriyapperuma described Sri Lanka-China relations as rooted in centuries-old historical, cultural and emotional ties that go far beyond commercial transactions. He cited Port City Colombo as a symbol of the enduring partnership and a platform capable of enhancing Sri Lanka’s long-term economic growth and global connectivity.

Acting Board of Investment Chairman Dr. Sulakshana Jayawardena highlighted the broader benefits of Chinese-backed investments, noting that projects such as Port City Colombo not only attract foreign capital but also create employment opportunities and facilitate technology transfer. He identified high-tech manufacturing, pharmaceuticals and textiles as promising areas for deeper cooperation.

Dr. Jayawardena also emphasized the importance of strengthening collaboration in research and education, expressing hope that institutions such as Peking University could serve as bridges for academic exchanges and help Sri Lanka benefit from China’s experience in special economic zone management, industrial development and workforce training.

Throughout the visit, Prof. Wang presented Peking University’s strengths in area studies and international communication and reaffirmed the university’s commitment to supporting research aligned with Sri Lanka’s development priorities. He also stressed the importance of enhancing scholarly and cultural exchanges to deepen mutual understanding and further strengthen the longstanding friendship between the two nations.

The discussions highlighted that Sri Lanka-China relations encompass not only trade and investment, but also social, cultural and educational cooperation, reflecting a multifaceted partnership aimed at promoting sustainable development and stronger people-to-people ties.

US Assistant Secretary of State for South and Central Asian Affairs S. Paul Kapur arrived today in Colombo on a three-day visit from June 21 to June 24.

While in Sri Lanka, Assistant Secretary Kapur will meet with senior government leaders, private sector executives, and representatives of U.S. companies to discuss expanding bilateral trade and investment, strengthening security cooperation, and advancing shared priorities in the region.

The visit reflects President Trump’s commitment to strengthening partnerships that advance American prosperity and security, while deepening cooperation with Sri Lanka as a key Indian Ocean partner.