IMF to Sri Lanka: Stay the Course, Reap the Rewards

COLOMBO (News 1st); Senior officials from the International Monetary Fund (IMF) have commended Sri Lanka’s economic turnaround following a deep recession, urging the government to maintain its reform momentum to secure long-term stability and growth.

Speaking at the Press Conference on the Regional Economic Outlook for Asia Pacific at the IMF and World Bank Group Annual Meetings in Washington DC, Thomas Helbling, Deputy Director of the IMF’s Asia Pacific Department, highlighted the island nation’s impressive recovery, noting that Sri Lanka has transitioned from crisis to growth through a homegrown reform program.

“After, a deep recession during the crisis, Sri Lanka has now implemented a program, a homegrown reform program and now benefits from very strong growth, 5 percent last year.  We estimate 4.2 percent this year and the next year going towards potential of 3 percent,” Helbling said.

Helbling emphasized that continued implementation of the reform agenda is critical to sustaining this progress. “So the key advice at this point is really continue with program implementation, reap the full benefits of the program, and then growth will come and continue,” he said.

He also stressed the importance of fiscal consolidation and institutional stability, particularly the need to ensure the viability of state-owned enterprises. “This is essential to mitigate contingent risks to the budget and preserve macroeconomic stability,” Helbling added.

Echoing this sentiment, Krishna Srinivasan, Director of the IMF’s Asia-Pacific Department, praised Sri Lanka’s resilience and reform efforts.

“Sri Lanka has come a long way from where it was a few years ago,” Srinivasan said. “You’ve done the difficult part. Continue with the reforms, and you’ll see even greater benefits.”

The IMF’s endorsement comes as Sri Lanka navigates a delicate balance between fiscal discipline and economic growth, with policymakers under pressure to deliver results while maintaining social stability.