- IMF publication puts SL with Mongolia, Myanmar & Vietnam
- Island nation is classified as ‘late-dividend’ economy
- Says, Asian trade shallower than that of European
The International Monetary Fund (IMF) has placed Sri Lanka among four Asian economies at greater risk of growing old before getting rich. At the same time, the fund held up the country’s digital payments system as a regional model for cleaner public finances.
The findings are in ‘Shaping the Future of Asia: Opportunities and Challenges’, a book by IMF staff Rahul Anand, Thomas Helbling and Krishna Srinivasan. It was launched in Bangkok yesterday (12) at one of the sessions on the opening day of the IMF and World Bank Group Annual Meetings.
The IMF analysed 25 developing Asia-Pacific economies that are still adding workers. All 25 are projected to remain below the United States’ 2017 per capita income a decade after their working-age share of the population peaks. Sri Lanka, Mongolia, Myanmar and Vietnam face the greatest risk: their per capita GDP at that point is projected to fall below the European Union’s 1998 level.
The book classifies Sri Lanka as a ‘late-dividend’ economy, where the workforce is still growing but shrinking as a share of the population. It also lists Sri Lanka among fast-ageing emerging markets that pose specific challenges for banks and regulators. The country’s pension replacement rate is about 40% or less, among the lower rates in the region.
On digital payments, the IMF singled out GovPay, launched in February 2025, as an example of how digital payments strengthen fiscal governance. By November 2025, the platform had processed 50,602 transactions worth Rs 1.4 billion across more than 200 government agencies. The IMF said it could cut cash handling and administrative costs and reduce leakages and corruption. It could also bring informally held cash into the banking system.
By end-2024, more than 40% of total government revenue was collected digitally through LankaPay across eight agencies, the book said. It likened Sri Lanka’s Common Electronic Fund Transfer Switch (CEFTS) to India’s Unified Payments Interface (UPI). It noted that LankaQR has been interoperable with UPI since 2024 and also links with Alipay+ and UnionPay China. Deeper integration between CEFTS and UPI could facilitate trade, remittances and cross-border transfers, it said.
The IMF warned, however, that Sri Lanka’s identity and data layers lag behind its payments layer. The Sri Lanka Unique Digital Identity Project is scheduled for rollout from the third quarter of 2026, and the National Data Exchange platform is still being designed. Both will need robust data governance and privacy safeguards, the book said. It added that GovPay’s progress depends on wider digital financial literacy, particularly in rural areas, as well as on cybersecurity and affordable internet access.
Launching the book, IMF Managing Director Kristalina Georgieva said Asia will contribute 68% of global growth this year, above its record of nearly two-thirds since 1990. Extreme poverty in the region has fallen from over 25% to under 5%. She warned of more frequent shocks, citing El Niño. “There will be more fog on the economic horizon,” she said.
IMF Asia and Pacific Department Director Srinivasan said the region is ageing faster than any other. Fertility has fallen from six children per woman to 1.6, and the share of people aged 65 and above is set to double from 11% to 20% by 2050. China, Korea and Japan could lose up to a quarter of their workforce by then. “There are three Asias within one Asia,” he said, referring to the region’s early-, late- and post-dividend economies.
He said raising women’s employment rate to that of men would add 112 million workers. With reforms, GDP per capita could rise by over 20% in economies still gaining a demographic dividend.
The book estimates that artificial intelligence (AI) could lift annual growth by 0.5 to one percentage point in advanced Asian economies and by 0.2 to 0.8 percentage points in emerging and developing ones. Srinivasan stressed that “these are scenarios, not forecasts.” He added that readiness is uneven and that AI could widen gaps both across and within countries. Citing the IMF’s forthcoming Regional Economic Outlook, he said demand for workers in AI-exposed occupations fell by 10% but has since stabilised.
On trade, Srinivasan said restrictions worldwide have nearly tripled since 2019, hitting Asia hardest as the most trade-exposed region. However, he said regional integration “was built around supply chains, not final demand.”
The book finds Asia’s trade agreements shallower and less enforceable than Europe’s. Deeper agreements cutting non-tariff barriers could raise the region’s real GDP by about 1.8% in the long run.