IMF: Sri Lanka’s Poverty Still Above Pre-Crisis Levels

COLOMBO (News 1st); Despite signs of economic recovery, poverty levels in Sri Lanka remain higher than pre-crisis levels, according to Martha Woldemichael, the IMF Resident Representative in Colombo.

Speaking on the sidelines of the IMF’s fifth programme review, Woldemichael emphasized that protecting the poor and vulnerable remains a core pillar of the Fund’s engagement with Sri Lanka.

Referencing the latest World Bank estimates, she noted that while growth is returning, the benefits have yet to reach the most disadvantaged communities.

Under the Extended Fund Facility (EFF) programme, the IMF has established a floor on social spending, requiring the government to allocate a minimum amount toward welfare and poverty alleviation. This benchmark is assessed quarterly, and Woldemichael confirmed that the March 2025 target was met, thanks to several measures implemented by the authorities.

These include:

Increased cash payments under the Aswesuma welfare scheme

Extended benefit payment periods

Disbursement of school stationery allowances

Beyond meeting spending targets, the IMF is also working with the government to strengthen the coverage, targeting, and adequacy of social protection programmes.

The second phase of Aswesuma, which includes enumeration and onboarding of new applicants, is currently underway. A recertification exercise is also planned to address inclusion and exclusion errors, ensuring that benefits reach those who need them most.

Woldemichael emphasized that structural reforms being implemented under the IMF programme are expected to trickle down to the broader economy, helping to reduce poverty in the medium to long term.

“To bring down poverty rates, you really want to accelerate economic growth,” she said.