The Annual Economic Review and Financial Statements for the Year 2023, as presented by the Central Bank of Sri Lanka, underscored the critical importance of maintaining momentum in implemented and planned reforms to prevent economic instability.

It emphasised that deviating from these reforms could lead to recurring policy reversals and subsequent downturns, hindering the welfare of the populace and impeding sustained growth.

The review highlights the expected continuation of economic progress witnessed in the latter part of 2023, attributed to the ongoing reform agenda facilitated by the International Monetary Fund’s Extended Fund Facility (IMF-EFF) arrangement.

It anticipates broad-based economic expansion across sectors, with an emphasis on preserving domestic price stability through enhanced independence and accountability in monetary policymaking by the central bank, along with a prohibition on monetary financing of government deficits.

Regarding the external sector, stability is foreseen, underpinned by bolstering external reserves, normalisation of foreign inflows, and the completion of government foreign debt portfolio restructuring.

Furthermore, the financial sector is expected to maintain resilience, reinforced by legislative amendments and enhanced consolidation efforts.

While the government aims to continue institutional and policy reforms to enhance productivity and efficiency, fiscal consolidation remains crucial for transitioning the economy onto a sustainable path. However, the successful trajectory of Sri Lanka’s economic recovery hinges significantly on the continuity of ongoing reforms, including the successful continuation of the IMF-EFF arrangement and the completion of debt restructuring.

Given the ongoing crisis, any deviations from the established path could have severe socioeconomic repercussions, as evidenced by recent experiences, the central bank review underlined while adding therefore, there is no room for experimentation with uncharted policies, emphasising the imperative of staying committed to the reform agenda for the nation’s economic stability and growth.

Fibre2Fashion News Desk (DR)

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