US tariffs threaten troubled Sri Lanka's recovery: IMF

India's Prime Minister Narendra Modi (L) and Sri Lanka's President Anura Kumara Dissanayake after their bilateral meeting at the president's office in Colombo on April 5, 2025. [AFP]

Sri Lanka's recovery from its worst economic meltdown, which forced a sovereign default and toppled a president, will be undermined if punishing US tariffs resume, the IMF warned on Friday.

The United States is Sri Lanka's largest single market, accounting for almost a quarter of its $12 billion in merchandise exports. The trade balance is heavily in favour of the small South Asian nation.