According to the IMF, Cash-strapped Sri Lanka's economy showed "tentative signs of improvement" but recovery remains challenging and Colombo must pursue painful reforms.

The country was emerging from its unprecedented crisis due to policy missteps aggravated by external shocks including doubling of taxes, spending cuts and the scrapping of subsidies.

A currency crisis since late 2021 led to severe shortages of food, fuel and medicines and triggered months of protests that led to the toppling of former president Gotabaya Rajapaksa in July.