Having made commendable improvements to its crisis stricken economy, Sri Lanka looks forward to an economic recovery and growth this year. “I think this is going to be a year where we will be able to record a continuous trend of economic recovery,” said the Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe, on a recent edition of LMDtv.

LMD’s 2024 Sri Lankan Of The Year (SLOTY) noted: “We have been able to stabilise the economy and set up the foundation for it to move forward, if proper policy reforms and programmes are implemented. So I expect the economy to grow well above three percent in 2025.”

He explained how the Central Bank has consistently emphasised the importance of moving in one direction with regard to the country’s commitment to ongoing economic reforms.

Weerasinghe pointed out that to support economic growth, it is “necessary to implement all the structural reforms that we have committed to by enacting the necessary legislation, securing the social safety net, fighting corruption vulnerabilities, safeguarding the stability of the financial system and maintaining stable inflation.”

“I’m glad that despite changes in governments, all administrations have committed to maintaining this very narrow path,” he stated, and cautioned that any deviation from this trajectory will pose the risk of falling back into difficulties once again.

The governor also highlighted the importance of collaboration between the public and private sectors.

He elaborated: “When you look at Sri Lanka’s economic structure, historically the state sector has been involved in many public service deliveries such as electricity, utilities, water, telecommunications, insurance and even banking. There is a large public sector involvement, which is alright as long as those enterprises perform like private businesses without causing any burden to the treasury and taxpayers.”

Weerasinghe added that the public sector should focus on efficiency and providing services to the people at the most competitive rates in competition with the private sector. That strategy will create a level playing field for both sectors, he maintained.

“Enhancing the private sector’s ability to participate in more economic activities is also very important when you consider the fiscal consolidation path that the country is on,” Weerasinghe asserted.

He explained that this would lift the constrained ability of the government and taxpayers to support growth, in terms of public investment and expenditure: “There will be lots of opportunities and economic activities for the private sector to participate in, on a far more open, transparent and competitive basis – including areas in which the public sector is also involved.”

Ensuring good governance and addressing corruption are also important pillars for a recovering economy.

“This government has been given a strong mandate by the people to address corruption. So therefore, it’s easier for the administration to expedite and implement the necessary reforms,” he said.

Weerasinghe added: “This government has a responsibility to address corruption and governance issues, and that will certainly pave the way for more investor confidence and higher growth.”

People also have a responsibility to move the economy forward.

He posited: “The public’s reliance on subsidies must reduce, and the ‘subsidy culture’ of asking for everything from the taxpayer and government must be addressed. People should be able to conduct their businesses, improve their living standards and engage in econo­mic activities on their own on a sustainable basis without relying on someone else’s money. That’s very important for our people to understand.”

Weerasinghe concluded: “We need to change the perception that the government should provide everything. That’s not the way to go forward. There are lots of things that need to be done for Sri Lankans to change that mindset.”