The Governor of the Central Bank of Sri Lanka, Nandalal Weerasinghe, has warned that if the current economic reform program is reversed in any way, the country could face a crisis similar to the one experienced over the past two years.
He shared these views while addressing the annual conference of the Organization of Sri Lanka Trade Unions held in Colombo.
“The ongoing reform process includes measures to restore the economy to stable, unshakeable foundations, which are essential for medium and long-term growth. Although these reforms may be painful in the short term, the commitment of all parties to implementing these long-overdue reforms is crucial to guiding the economy towards sustainable and comprehensive growth.
No matter how effective such efforts are, any political or social uncertainty, or a reversal of the hard-won gains, will put significant pressure on the reconstruction process, altering the expected trajectory of the economy and potentially causing irreversible damage. This could lead to a renewed social crisis.
Given the current sovereign debt crisis, the government has no financial space to stimulate the economy through increased spending and tax cuts as it did in the past. Restoring financial and credit sustainability is the primary need now and for the future.”