Sri Lanka's Economic Reform Journey Faces Tough Road Ahead - IMF

COLOMBO (News 1st); The International Monetary Fund warned that the road ahead is going to be hard, and Sri Lanka must pursue with reforms.

Krishna Srinivasan, Director of the International Monetary Fund's Asia and Pacific Department, shedding light on Sri Lanka's economic journey amidst its adjustment program, emphasized the significant strides made by the country, showcasing tangible improvements in various economic indicators. He was responding to a question raised by News 1st's Zulfick Farzan. 

"When Sri Lanka embarked on this adjustment program, it was clearly facing challenging circumstances. However, we are witnessing early signs of recovery," stated Srinivasan. He likened these signs to "green shoots," symbolizing hope amid adversity.

Srinivasan provided key statistics to illustrate Sri Lanka's progress. Notably, real GDP expanded by 3% year on year in the second half of 2023. He highlighted a substantial decrease in inflation, with March figures at 0.9%, down from a peak of 70% in September 2022. Additionally, reserves surged by $2.5 billion in 2023, while the primary balance reached a surplus of 0.6% of GDP in the same year.

"The ambitious program undertaken by Sri Lanka is now yielding results," Srinivasan affirmed. 

He cautioned against premature celebration, acknowledging the challenges ahead. "The road ahead is going to be harder," he cautioned, emphasizing the necessity for continued efforts in fiscal policy, reserve building, and resilience enhancement.