The Deputy Minister of Finance Anil Jayantha Fernando during a programme on Ada Derana stated that the Government continues to maintain the growth target of 7% this year, though the World Bank and the IMF predict a much lower rate.
“As of now, the medium-term growth as was explained in the budget speech 2026 by President Anura Kumara Dissanayake, we target an inclusive and sustainable growth of more than 7%. The target has not changed. As of now, we are moving on the same trajectory to achieve this particular target in the medium term.”
The IMF and the World Bank project growth at 3.5%, and the Central Bank estimated growth at 4-5%.
Political Economist Researcher Shiran Illanperuma said during the programme: “Growth wasn’t a smooth drive from 2022 to 2026. With the reforms that have come with time and with a significant amount of the population affected, there are people who are unable to afford electricity, along with high taxes, high cost of living, high cost of utilities and a significant amount of people remain in poverty. We are experiencing higher poverty levels, and the earlier crisis of 2022. What has actually happened is that inflation levels have flattened slightly. But income levels have not risen to match that.”
Illanperuma added that The World bank and IMF both are projecting Sri Lanka’s growth is not going to be high as anticipated. This is accurate from a global perspective looking at the IMF growth forecast, globally. For the next year 2027 and 2028 growth is going to be muted for various reasons.
“We’ve been in a long recession since 2008, the global financial crisis. And Sri Lanka hasn’t come out of it yet. The effects of Ditwah are going to be a challenge. And it will be a challenge to mobilise investment into the country.”
He suggested that if the country is to grow it needs to have the investment to rebuild above and over the capital stock available in the country and to accumulate capital beyond the benchmark and have investments in new industries. And that is an aspect Sri Lanka is far away from.
Illanperuma stated that if global economic growth is projected to be slow, and the GDP rate is to go down, the potential for tax revenue is going to be lower. With less economic activities, the actual tax base is also to be lowered. These are macroeconomic dimensions and economic dynamics the Government has to consider.
Furthemore, according to Illanperuma, in order for the Government to maintain its long term sustainability, particularly on the external side towards economic growth, the metrics the Government is looking for differs relatively from the actual dynamics to focus including; foreign currency inflows and export sector (apparel and textiles, tea, rubber-based products, coconut-based products and other goods).