Nandalal Weerasinghe said that Sri Lanka is now in a stronger position to withstand global economic shocks, including rising oil prices and tensions in the Middle East.
Speaking in an interview with Bloomberg, Weerasinghe noted that the country’s foreign reserves have increased from nearly zero during the economic crisis to more than $7 billion, providing a crucial buffer against external pressures.
He also pointed out that domestic inflation has fallen sharply from around 70 percent at the height of the crisis to 1.6 percent, giving the Central Bank greater flexibility to manage external shocks without destabilising the economy.
According to the Governor, the main risks currently facing Sri Lanka are linked to global supply chain disruptions rather than a shortage of foreign exchange within the country. He added that the exchange rate will be used as a shock absorber to help maintain fiscal stability amid external pressures.
Commenting on the country’s programme with the International Monetary Fund, Weerasinghe said negotiations are expected to resume in March, with the next programme review likely to be approved by May 2026.
He also expressed optimism that Sri Lanka could record economic growth of close to 5 percent this year, exceeding earlier IMF projections. However, he cautioned that a prolonged escalation of conflicts in the Middle East could pose risks to the country’s recovery, although Sri Lanka currently has sufficient buffers to maintain economic stability.
