IMF Urges Sri Lanka to 'Stay the Course' on Reforms for Enduring Economic Stability

WASHINGTON D.C. – The International Monetary Fund (IMF) has strongly advised Sri Lanka to maintain its current trajectory of economic reforms, asserting that the most difficult period of the economic crisis is now over and future gains depend on sustained policy implementation.

The guidance was delivered by Mr. Thomas Helbling, Deputy Director of the IMF's Asia and Pacific Department, during a press briefing held concurrently with the IMF and World Bank Annual Meetings.

Mr. Helbling highlighted the significant progress made by the island nation following the implementation of the IMF-supported program, noting the strong initial recovery.

"If we look back, following the economic crisis, Sri Lanka implemented the IMF program. As a result of that, very strong growth benefits are now being reaped," Mr. Helbling stated.

He provided encouraging projections for the economy: "Last year, there was a 5% growth. We estimate it will be 4.2% this year. And there is the potential for it to become 3% next year."

Key Advice: Sustained Reform is Crucial

Mr. Helbling stressed that the paramount advice for the government at this juncture is to continue the reform program to secure greater and long-lasting benefits.

"The most important advice we can give at this moment is that to achieve greater benefits, it is vital to continue this program further. Then growth will come, and it will be sustained," he he emphasized.

Focus Areas for Stability

The Deputy Director identified two critical areas essential for ensuring Sri Lanka’s long-term stability and insulating the recovery from risks:

1. Fiscal Consolidation: "In terms of what is important for Sri Lanka's stability, Fiscal Consolidation plays a major role in mitigating potential budgetary risks."
2. State-Owned Enterprises (SOEs): "Attention must also be paid to the viability of State-Owned Enterprises. This is extremely important for the long-term sustainability of these gains."

The IMF's message is clear: while the initial crisis response has generated positive momentum, adhering to the challenging path of fiscal discipline and structural reforms is the key to achieving sustainable economic growth and stability.