World Bank sets out reform agenda to lift Sri Lanka's investment and exports

World Bank Senior Country Economist Richard Walker says export growth has slowed

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THE ond Bank yesterday outil ined a critical package of reforms it says Sri Lanka must push through to attract capital, revive exports and build long-term competitiveness, warning that export growth has slowed and foreign direct investment remains far too low to meet the country's growth objectives.

World Bank Senior Country Economist for Sri Lanka and the Maldives Richard Walker said the country's export and investment performance remained weak.

"Export growth has slowed, and foreign direct investment continues to hover around 0.5% of GDP, far below what Sri Lanka needs to reach its $ 36 billion export target by 2030," he said, speaking at the launch of the World Bank's Sri Lanka Development Update.

He identified several areas where reforms were critical. "Policy consistency is key," he said, adding that fiscal reforms must continue to strengthen tax administration and establish a transparent framework for managing tax expenditures.

"Spending better and more progressively, while continuing tax reforms, will help balance growth, debt sustainability, and equity." He said enforcing cost-reflective utility pricing remained essential for ensuring the financial viability of state enterprises.

Walker cautioned that monetary policy must remain wellcalibrated to control inflation and prevent excessive credit growth, with continued vigilance over financial sector risks, including high non-performing loans and the exposure of banks to Government debt.