The World Bank Group and the Government of Sri Lanka launched a Country Partnership Framework, or CPF, running from 2026 to 2030, providing $2 billion in financing across five years, and set a target for Aswesuma, the government’s cash transfer programme, to grow to 7.4 million beneficiaries by 2027 (Chart 1), up from 4.4 million in 2025, even as the government separately plans to cut 400,000 families, who no longer require support, from the same programme by December 2026.
The Bank’s Country Manager for Sri Lanka, Gevorg Sargsyan, said at the launch of the Country Partnership Framework, the financing would go “to the public and private sector.”
To achieve coverage targets within the cash transfer scheme for the poor, Aswesuma, the Bank identified three areas where the government might require support.
First, it will help Sri Lanka scale up shock-responsive payouts, so aid reaches people after a disaster. The Bank said “poverty and vulnerability are likely to worsen” as incomes and costs come under pressure in the affected districts following cyclone ‘Ditwah’ in November 2025, which affected 2 million people and caused $4.1 billion in damage.
Second, the Bank will help tighten targeting so benefits go to the households that need them most, and third, support the shift to delivering those benefits through digital, auditable platforms.
The previous partnership ran from the financial years of 2024 to 2025. According to the Completion and Learning Review of the outgoing partnership, the Bank noted that Aswesuma aimed to channel 60% of its benefits to the poorest fifth of the population by 2026 (Chart 2). The review found the programme reached 48.2% as of 2025 and rated the result “Partially Achieved.”
Originally, the previous partnership was intended to run from the financial years of 2024 to 2027. However, given the improved economic outlook and the new government elected in November 2024, the Bank “opted to prepare a new five-year CPF,” it notes in its Completion and Learning Review.
The old framework was replaced two years into its own four-year plan. The Bank granted a $200 million loan to the government in 2023, under the previous CPF, to support the rollout of Aswesuma. As of January 2026, $55.9 million of that loan remained undisbursed, meaning the government has not drawn on the remaining balance.
To understand where the poorest lie, Sri Lanka must first establish a clear picture of its poverty numbers. In a country diagnostic for Sri Lanka published in 2025, the Bank said Sri Lanka has a limited understanding of current poverty and household welfare, since “the latest available Household Income and Expenditure Survey (HIES) is from 2019, preceding both the COVID-19 pandemic and economic crisis.”
The Bank loaned to the government in 2023 to build a database mapping the location of 3.6 million households across the country, more than half of Sri Lanka’s 6.1 million households, according to the 2024 Census of Population and Housing.
The Morning, a newspaper, reported on the 5th of July 2026 that the government plans to cut Aswesuma beneficiaries through to 2028. It quoted Deputy Minister of Rural Development, Social Security, and Community Empowerment Wasantha Piyathissa, who told The Sunday Morning, another news body, that 400,000 families were due to exit the programme by the end of the year.
“The agreement originally scheduled certain categories to be removed from Aswesuma earlier, but that has been slightly delayed. However, a significant group is scheduled to be removed by 31 December, as per the agreement,” he said.
The precise commitment by Sri Lanka made with the IMF is: “Obtain Cabinet approval of an updated graduation strategy for the four household categories that are receiving benefits under Aswesuma,” according to the IMF’s own Country Report.
The four household categories are extremely poor, poor, transitional, and other. The IMF’s Country Report states no verbatim commitment to remove any specific category of Aswesuma beneficiaries.
In the same story, University of Peradeniya economics professor Ananda Jayawickreme said: “Since the 2022 economic crisis, conditions for many households have actually worsened. People are facing higher prices while incomes have remained stagnant, and some sources of income have disappeared altogether.”
He said he supported removing beneficiaries whose income levels made them ineligible, but warned that cutting people from the programme simply to meet IMF conditions would be problematic.
The IMF later reported that “we [assisting the government] concurrently improved the adequacy of cash transfers by obtaining parliamentary approval to increase the monthly cash transfer amounts for the poor and extremely poor categories by Rs1,500 and Rs2,500, respectively, starting from January 2025,” according to a country update, published in 2025.
Economic stabilisation “has not yet translated into a recovery in welfare,” the Bank reported in a country diagnostic for 2025. Interest payments consumed nearly two-thirds of the government’s revenue in 2024, a constraint the Bank says limits room for other spending.