April 29, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) expressed optimism regarding the nation’s stability, contingent upon the sustained implementation of comprehensive reforms supported by the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) programme.
In its Annual Economic Review 2023, the financial regulator of the country highlighted the potential for continued economic recovery and greater macroeconomic stability in Sri Lanka.
Despite intermittent supply-side shocks and subdued demand conditions, inflation is forecasted to hover around the 5 per cent target in 2024, with expectations of stabilisation in the medium term through appropriate policy measures.
Emphasising the significance of the CB’s independence and public accountability in monetary policymaking, the institution underscored its role in maintaining domestic price stability.
Anticipated signs of economic recovery in 2023 are expected to manifest across all sectors, bolstered by factors such as the resurgence of the tourism sector, increased workers’ remittances, and non-debt inflows, contributing to enhanced external buffers.
As vulnerabilities diminish, the financial sector is projected to expand its services, supported by legislative strengthening, it added.
Meanwhile, the government is expected to persist in fiscal consolidation efforts and essential reforms to steer the economy towards sustainability.
Looking ahead, challenges such as climate change, population ageing, and geopolitical tensions necessitate sustained commitment to IMF-EFF programme continuation, successful debt restructuring, and the seamless execution of productivity-enhancing reforms, underpinned by broad political and social consensus.
