The International Monetary Fund (IMF) has stressed the urgent need for Sri Lanka to maintain its reform momentum to ensure macroeconomic stability, debt sustainability, and long-term inclusive growth.
IMF Senior Mission Chief for Sri Lanka, Peter Breuer, warned that there is no room for policy errors, emphasizing the importance of sustained revenue mobilization to restore fiscal stability and maintain essential government services.
He highlighted the need to boost tax compliance and eliminate exemptions to sustain economic reforms while ensuring social spending targets are met. Breuer also called for continued reforms in the social safety net to protect the most vulnerable and promote inclusive growth within limited fiscal space.
Additionally, he urged Sri Lanka to restore cost-recovery electricity pricing without delay to contain fiscal risks from state-owned enterprises.
In the financial sector, Breuer emphasized the importance of resolving non-performing loans, strengthening governance in state-owned banks, and improving insolvency and resolution frameworks to support economic recovery.
Addressing Sri Lanka’s long-term structural challenges, he stressed the need for steadfast implementation of governance reforms to unlock the country’s full economic potential.
