Courtesy Hiru News

Dr. Nandalal Weerasinghe, the Governor of the Central Bank of Sri Lanka, has cautioned that political or social uncertainties, or reversals of recent achievements, could significantly disrupt the country’s economic reform agenda. He warned that such disruptions could lead to deviations from the planned policy trajectory, potentially resulting in severe and lasting negative impacts on the economy, as well as a recurrence of the economic and social crises experienced in Sri Lanka over the past two years.

Dr. Weerasinghe made these comments during his address at the 37th Annual Conference of the Organisation of Professional Associations of Sri Lanka, held on Monday (26) at the Shangri-La Hotel in Colombo. The conference’s theme was “Towards Sri Lanka’s Sustained Economic Growth.”

He emphasized that the current reform agenda includes measures designed to enhance the economy’s resilience and stability, which are crucial for medium- to long-term growth. Maintaining macroeconomic stability is essential for ensuring a sustained growth trajectory, according to the Central Bank Governor.

Dr. Weerasinghe acknowledged that while the reforms may be challenging in the short term, it is vital for all stakeholders to remain dedicated to their swift and effective implementation. This commitment is necessary to guide the economy toward sustainable and inclusive growth.

He reiterated that despite efforts to implement these reforms, any political or social instability, or setbacks in achieving goals, could threaten the intended policy trajectory. This could result in adverse and irreversible effects on the economy and could potentially lead to a recurrence of the crises experienced in recent years.

Furthermore, Dr. Weerasinghe pointed out that achieving macroeconomic stability alone would not be enough to drive the economy to a high-growth path that could quickly advance Sri Lanka to developed status. He highlighted that, given the current sovereign debt crisis, the government lacks the fiscal space to stimulate economic growth through increased spending or reduced taxes. Reinstating fiscal and debt sustainability remains the primary focus both now and for the future.