The International Monetary Fund (IMF) has praised Sri Lanka’s continued progress under its economic reform program, noting that the country is showing strong growth momentum following its recovery from a severe economic crisis.
At a recent press briefing on the IMF’s Regional Economic Outlook, Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, and Thomas Helbling, Deputy Director, shared updates on Sri Lanka’s economic performance and outlined key policy priorities moving forward.
Helbling stated that Sri Lanka is now reaping the benefits of its IMF-supported reforms after enduring a deep recession during the crisis.
“After a deep recession during the crisis, Sri Lanka has now implemented the program and is benefiting from very strong growth — 5% last year, with an estimated 4.2% this year and next year, moving toward a potential growth rate of around 3%,” he said.
He emphasized that continuing with program implementation is critical to sustaining these economic gains.
“The key advice is to continue with program implementation, realize the full benefits of the reforms, and ensure that growth remains on track. For Sri Lanka, what is important is to stay on the path of stabilization,” he added.
Helbling further highlighted that macroeconomic stability, fiscal consolidation, and reforming state-owned enterprises (SOEs) are vital for maintaining long-term fiscal health.
“Fiscal consolidation plays a key role. Ensuring the financial viability of state-owned enterprises and mitigating contingent fiscal risks will be crucial for sustaining these benefits,” he noted.
Echoing these views, Krishna Srinivasan remarked that Sri Lanka has made remarkable progress compared to a few years ago.
“Sri Lanka has come a long way from where it was just a few years ago. Our message is to stay the course. The country has already done the difficult part — by continuing with reforms, you will continue to see the benefits,” Srinivasan said.
Helbling also pointed out that while several factors led to the earlier economic crisis, strengthening governance and institutional frameworks should now be the main focus.
“Looking ahead, the key is to establish a strong institutional framework on both the macroeconomic policy and governance fronts. Public investment management and fiscal frameworks are critical components of this effort,” he explained.
He acknowledged the government’s commitment to governance and structural reforms, citing “impressive progress” in meeting IMF benchmarks, especially regarding electricity pricing and cost recovery measures.
“Restoring and maintaining fiscal discipline, as well as reforming state-owned enterprises, are crucial steps going forward,” Helbling stated.
Commenting on potential price adjustments, he said such decisions depend on factors like climate conditions and global energy prices, adding that the government has been strongly supportive of the overall reform agenda.
Both IMF officials concluded by reaffirming their support for Sri Lanka’s economic reform path, stressing that staying the course is key to ensuring sustained growth, fiscal stability, and long-term resilience.