COLOMBO, April 10 -- The International Monetary Fund (IMF) approved a further $700 million in loans for Sri Lanka on Thursday (9), while urging Colombo to accelerate reforms to guard its post-2022 economic recovery and address shocks from the Middle East crisis.

The Fund mission approved the latest tranche of its four-year $2.9 billion bailout provided officials restore cost recovery in energy pricing, among other conditions.

The government has said it will spend nearly $200 million on fuel subsidies after an energy crunch caused by the Iran war forced it to raise retail prices by a third, in line with global trends.

The IMF is opposed to general energy subsidies, and wants Colombo to ensure cost recovery in electricity prices, which a...