The International Monetary Fund (IMF) has raised its growth projection for Sri Lanka in 2025 from 3.1% to 4.2%, as Sri Lanka reaps benefits from its homegrown reform programme, according to IMF Deputy Director of the Asia and Pacific Department Thomas Helbling.

At the Asia Pacific Department’s Annual Meeting, Helbling stated that, following a deep recession during the crisis, Sri Lanka has implemented a homegrown reform programme and now benefits from very strong growth, reaching 5% last year.

“We estimate 4.2% this year and the next year going toward the potential of 3%,” he said, adding that the key advice is to continue with programme implementation, reap the full benefits of the programme.

Moreover, he said that it is important to continue on the way to stabilisation, and make sure that the institutional and other factors for macroeconomic stability are in place. 

He noted that fiscal consolidation plays a key role, and ensuring the viability of State-owned enterprises to mitigate or lower contingent risks to the budget will be key for these benefits to continue.

Further, Helbling said that public investment management is a key part of sound fiscal frameworks, to continue the progress under the programme.

On electricity pricing, he said it depends on several factors such as climate, international energy prices, which are part of the ongoing programme negotiations.

He noted that restoring or maintaining and keeping the fiscal house in order, on the State-owned enterprise side, is really crucial to go forward.

“We just know that under the programme, it’s a critical benchmark(electricity pricing). And so far, the Government has wholeheartedly supported the reform,” he added.