Western, North Western and Central Provinces Continued to Anchor the Sri Lankan Economy

Western province increased its share in nominal GDP to 43.4 per cent, continuously tightening the grip on the country’s economy during 2022. The strong presence of the Western province is visible in most of the economic activities, especially in Services and Industry sectors. Thereafter, North Western (11.2 per cent) and Central (10.0 per cent) provinces recorded second and third highest shares in the economy, respectively.

The IMF Board completed the first review under the 48-month Extended Fund Facility with Sri Lanka, providing the country with access to SDR 254 million (about US$337 million) to support its economic policies and reforms.

Sri Lanka’s performance under the program was satisfactory. All but one performance criteria and all but one indicative targets were met at end-June. Most structural benchmarks due by end-October 2023 were either met or implemented with delay. Notably, the authorities published the Governance Diagnostic Report, making Sri Lanka the first country in Asia to undergo the IMF Governance Diagnostic exercise.

The authorities have made commendable progress toward restoring debt sustainability, raising revenue, rebuilding reserves buffers, reducing inflation, and safeguarding financial stability. Strong commitment to improving governance and protecting the poor and vulnerable remains critical.