📈 IPS Report 2025: SL Must Convert Rebound to Structural Growth.

• The Institute of Policy Studies (IPS) urges Sri Lanka to convert its post-crisis cyclical rebound into a structurally driven growth process, warning that sustaining recovery hinges on deeper productivity and efficiency gains. • GDP growth of 4.9% in H1 2025 reflects a stable policy environment. However, continued momentum requires structural reforms, particularly tackling rigidities in land and labour markets, and increasing openness to trade and investment. • Digitalisation and technology infusion are key to accelerating productivity gains while broader institutional reforms take effect. • Key Digital Data/Opportunities: • National computer literacy remains low at 39% (falling to 17.9% in the estate sector), highlighting the need for targeted investment. • Digital payments are strong among vulnerable groups, with 42% of the poorest 40% of households already using them, which can strengthen e-commerce. • Extending digital tools to agriculture will enhance export competitiveness via product traceability and reduced trade costs. • Policymakers must balance long-term reform goals with immediate short-term social demands as the country prepares to resume its external debt service obligations.