Sri Lanka’s economy is on a stable path towards recovery, with inflation under control and growth projected at 4.5% for the year, says Central Bank Governor Dr. Nandalal Weerasinghe.
Speaking on the country’s economic outlook, Dr. Weerasinghe said inflation has already reached the Central Bank’s target of 5%, and with a policy rate of 7.75%, the country is maintaining a positive real interest rate—providing room for monetary adjustments if necessary.
“This gives us ample room to adjust and support the economy should the need arise,” he noted, adding that the current monetary framework offers resilience in the face of potential global or domestic shocks.
On the fiscal side, Dr. Weerasinghe stressed the importance of revenue-based consolidation, driven by broader tax collection, improved compliance, and a modernized tax administration—essential measures, he said, for sustaining debt management and restoring investor confidence.
He also highlighted ongoing reforms of state-owned enterprises (SOEs), including the implementation of cost-reflective pricing models, which have reduced fiscal pressure on the treasury.
“Continued SOE reforms and sustained revenue mobilisation will be critical to ensure public finances remain stable, freeing resources for priority investment and enhancing resilience against future shocks,” Dr. Weerasinghe added.
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