Sri Lanka Must Strengthen Institutions to Avoid Repeat of Fiscal Crisis : IMF

COLOMBO (News 1st); The International Monetary Fund (IMF) has emphasized the need for robust institutional reforms and sound public investment management as Sri Lanka continues its recovery from a deep economic crisis.

Responding to a question posed by News 1st's Zulfick Farzan on the legacy of fiscal mismanagement and non-productive infrastructure investments, Thomas Helbling, Deputy Director of the IMF’s Asia Pacific Department, acknowledged that multiple factors contributed to the crisis. However, he stressed that the priority now is to look forward and build resilience through structural reforms.

“There were many factors that contributed to the crisis,” Helbling said. “The key is to go forward and establish the institutional framework—on the macroeconomic policy side and on the governance side.”

Helbling highlighted public investment management as a critical component of a sound fiscal framework, noting that the Sri Lankan government has committed to reforms under the IMF-supported program. He commended the progress made so far, but underscored the importance of continued advancement along the benchmarks laid out in the program. The IMF’s remarks come as Sri Lanka works to stabilize its economy, restore investor confidence, and ensure that future public spending is efficient, transparent, and growth-oriented.