IFC urges Sri Lanka to lock in reforms, leverage private capital to reach 7% growth target

INTERNATIONAL Finance Corporation (IFC) South Asia Regional Director Imad Fakhoury has urged Sri Lanka to move beyond economic stabilisation and decisively enter a phase of competitive, private sector-led growth, warning that the Government’s limited fiscal room makes sustained reforms and private capital mobilisation indispensable.

- BY CHARUMINI DE SILVA

Delivering the keynote at the ‘Investment Point of View’ session of the Sri Lanka Economic Summit organised by The Ceylon Chamber of Commerce, he said the country’s hard-won stability now provides a crucial opening to lift public investment, strengthen competitiveness, and scale islands of excellence in high-value sectors.

"Fiscal consolidation must not be seen as an end in itself, but as the foundation for long-term development, serving to unlock infrastructure expansion, exports, and productivity-driven growth," he stressed.

He noted that Sri Lanka's recovery from the crisis is built on measurable gains, including a current account surplus, exceeding International Monetary Fund (IMF) targets for the primary surplus, and a projected decline in the debt-to-GDP ratio to below 95%, ahead of the IMF's 2032 timeline.

However, he cautioned that maintaining this trajectory is essential for foreign and domestic investor confidence, particularly as the State cannot finance the country's development priorities alone.

"Progress achieved so far must now be followed by deeper reforms to improve the overall business environment," he added.