Road ahead demands steadfast focus on sustaining reform agenda: CB Governor

Dr. Nandalal Weerasinghe

Sri Lanka must maintain a firm focus on reforms, private sector empowerment and consistent policymaking, to secure a lasting economic recovery and sustainable debt levels, Central Bank Governor Dr. Nandalal Weerasinghe said yesterday, cautioning that the country’s transition remains fragile.
“These would be critical to put the economy on a path towards lasting recovery and debt sustainability,” Dr. Weerasinghe said at the opening of a high-level forum in Colombo, co-hosted by the Finance Ministry, Central Bank and International Monetary Fund.

Dr. Weerasinghe, in his address, acknowledged the magnitude of the economic collapse in 2022, describing it as the nation’s first simultaneous sovereign debt and balance of payment crises, triggered by “structural impediments and poor macroeconomic management, especially with persistent fiscal imbalances”.

Since then, the island nation has navigated a sharp turnaround, returning to positive growth in the second half of 2023, reversing inflation to single digits, building reserves and narrowing the fiscal deficit. The primary balance has swung into surplus and the external current account recorded two straight years of surpluses for the first time in recent history.

Dr. Weerasinghe noted that sovereign debt restructuring is nearing completion, with finalisation of bilateral deals expected to ease debt servicing pressures. He stressed that reform efforts extended beyond macroeconomic metrics, citing the adoption of new legislation such as the Central Bank Act, Public Financial Management Act and Anticorruption Act as steps to restore institutional credibility and improve governance.

“Stabilisation is not an end in itself but a foundation for what must come next: a renewed focus on growth, resilience and inclusion,” he added.