Sri Lanka has made a significant recovery after enduring its worst economic crisis in history, the Policy Agenda -2025 and Beyond of the Central Bank stated.
It stated that macroeconomic stability that was restored through decisive policy action and collective resolve has laid the foundation for a stronger, more resilient economy.
Leveraging on the stability achieved, the country is making notable progress by continuing with the economic reform agenda, strengthening its economic buffers, institutions and governance, and building overall resilience for potential headwinds, the governor of the Central Bank Dr. Nandalal Weerasinghe said.
He said significant progress was made on the fronts of debt restructuring as well as the Extended Fund Facility (EFF) arrangement with the International Monetary Fund (IMF).
Faster-than-expected recovery in domestic economic activity was supported by renewed business and consumer confidence. General price levels have adjusted down following a period of high inflation, enabling the continuation of the eased monetary policy stance.
External buffers have been built, supported by improved foreign exchange inflows amidst the flexible exchange rate regime. A notable improvement in the fiscal sector performance was witnessed along with efforts to enhance support extended to the poor and vulnerable. “Financial system stability was reinforced through the strengthening of the regulatory framework and improved risk management and monitoring. These achievements are outcomes of the continued commitment and perseverance and the sacrifices made by all stakeholders of the economy, including the general public, in pursuing the economic reform agenda,” the Governor said, adding that the measures helped restore investor confidence and set the platform for the long-term transformation of the economy. While broad-based stability has been achieved, the focus, going forward, would be on fostering sustained growth, which requires driving innovation, enhancing productivity, maintaining a strong commitment to implementing structural reforms, and encouraging greater stakeholder collaboration without compromising hard-earned stability.
The Governor said the Central Bank, in keeping with its mandate as stipulated in the Central Bank of Sri Lanka Act, will commit to maintaining domestic price stability and securing financial system stability, thereby playing a leading role in creating an enabling environment for all stakeholders of the economy to thrive.
