CBSL Governor warns reversal of reforms could trigger new crisis

Dr. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, has cautioned that reversing the current economic programme could lead to a resurgence of the severe economic and social crisis Sri Lanka endured nearly two years ago.

Dr. Weerasinghe emphasized that the ongoing reform efforts are crucial for restoring the economy and ensuring medium- to long-term growth.

He acknowledged the challenges posed by short-term reforms but stressed that it is vital for all stakeholders to remain committed to these long-overdue changes to steer the economy towards sustainable and comprehensive growth.

There, Dr. Weerasinghe cautioned that any political or social instability or rollback of progress made could jeopardize the debt restructuring process and derail the economy’s trajectory, potentially causing a repeat of the recent crisis.

Addressing the 37th Annual Conference of the Organisation of Professional Associations of Sri Lanka (OPA) in Colombo, Dr. Weerasinghe noted that, given the current debt crisis, the government lacks the financial means to stimulate growth through increased spending and tax cuts as in the past.

He underscored that achieving fiscal and credit sustainability is now, more than ever, essential for the country's economic future.