Sri Lanka, July 17 -- Sri Lanka's efforts to rebuild its foreign exchange reserves are coming under renewed pressure as a surge in fuel and vehicle imports drives the external account back into deficit, potentially complicating the country's path towards meeting the International Monetary Fund's reserve targets, according to a new report by KPMG.

The professional services firm's latest macroeconomic outlook said mounting external pressures could keep Sri Lanka's gross official reserves below the IMF's revised end-2026 target of US$8.6 billion despite the economy continuing to recover. Gross official reserves stood at US$6.45 billion at the end of June.

Sri Lanka's post-crisis recovery gained momentum, with the economy expanding 5.1 per...