CBSL Chief: Don't Forget Reforms Amidst Ditwah Recovery! 🇱🇰

CBSL Governor Dr. Nandalal Weerasinghe warns against letting post-Ditwah reconstruction overshadow critical structural reforms, emphasizing that Sri Lanka's growth foundation remains fragile. • Reform Agenda: Crucial for macroeconomic, fiscal, external, and financial stability. Must continue, especially in trade and labour productivity. • Ditwah Impact: Expected to cause a temporary inflation uptick (2% to 3%) due to supply chain disruptions, but monetary stability will hold. Fiscal space is available for reconstruction. • Balance of Payments: Minimal significant external impact expected from the cyclone. • Global Risks: Concerns over US tariff policy have eased. Energy prices and political developments remain uncertainties, though renewables help mitigate exposure. Global interest rate changes pose limited impact. • Medium-Term Growth: Shift from consumption to investment-led growth is vital. Essential reforms include improving sovereign rating, reducing non-tariff barriers, enhancing labour productivity, and strengthening regional integration (e.g., RCEP).