IMF: Sri Lanka’s Recovery Gains Momentum, But Frontier Economies Must Stay Vigilant

COLOMBO (News 1st); The International Monetary Fund (IMF) has commended Sri Lanka’s progress following its debt restructuring, noting that the country is on a path toward growth and restoring investor confidence.

Speaking at a briefing on global financial stability, Tobias Adrian, Director of the IMF’s Monetary and Capital Markets Department, highlighted improving market conditions for frontier economies.

“Sri Lanka has been emerging from a debt restructuring and is on the path to growth and to restoring confidence,” Adrian said. “When we look at global markets relative to frontier economies—low-income countries with market access—we do see that financial conditions are fairly easy, so there is liquidity. Countries can access markets. Indeed, we have seen quite a bit of issuance this year, in line with historical standards.”

Echoing this optimism but cautioning against complacency, Jason Wu, Assistant Director of the same department, stressed the need for continued reforms:

“Sri Lanka’s economic performance has improved, which is good to see. On frontiers in general, the softer dollar has lessened external pressure, but now is not the time to be complacent. Frontier economies need to continue improving fundamentals—both on the current account and fiscal buffers—as highlighted in the WEO.

“So, overall, I think we acknowledge the resilience that frontier economies and emerging markets have demonstrated through this period. Obviously, there is more work to be done as well,” he added.