The Central Bank of Sri Lanka (CBSL) says that the Sri Lankan economy, which faced extreme headwinds and heightened uncertainties during the first half of 2022, has shown signs of stability in the second half of the year so far.

In a report titled “Recent Economic Developments: Highlights of 2022 and Prospects for 2023” published by the CBSL today (Nov 09), it is revealed that the stability has been assisted by the myriad of multifaceted policy interventions undertaken to steer the economy to transition towards a path of stable and sustainable growth over the medium term.

The CBSL also emphasizes that the debt restructuring process has also reached an advanced stage along with the engagement with the International Monetary Fund (IMF) on a macroeconomic adjustment programme progressed on many fronts, with a staff-level agreement for an Extended Fund Facility (EFF) which was reached in early September 2022. 

However, the economy is expected to transit onto the path to recovery from the latter part of 2023 in consideration to the progress that has been made thus far in relation to the IMF-EFF programme and debt restructuring negotiations, the reforms that have already been undertaken and those that are to be implemented in the period ahead, the CBSL pointed out further.

Nevertheless, the progress will hinge on policymakers’ unwavering commitment to implementing policy reforms in a timely, holistic, and efficacious manner, the CBSL states, adding that such commitment should be ensured by remaining unhampered by political and election cycles. 

Further, the report also includes that the matter is imperative to prevent any oscillations of national policies in the crucial period ahead in order to strengthen the economy’s resilience to external shocks, thereby ensuring its unwavering progress over the medium term.