Sri Lanka’s economy nears pre-crisis level: CBSL Governor

The national economy has returned to nearly pre-crisis levels following a rapid turnaround from its worst downturn, according to Central Bank Governor Dr Nandalal Weerasinghe.

Speaking at a briefing organised by the Ministry of Foreign Affairs, Dr Weerasinghe highlighted stronger public finances, improved fiscal balances, and progress towards debt sustainability as central pillars of the rebound. He noted that the speed of the recovery is particularly significant given the depth of the balance-of-payments crisis that led to the nation's 2022 sovereign default, positioning the country as one of the fastest to restore macroeconomic stability globally.

A sharp turnaround in state finances has driven the economic recovery. The Governor stated that the government's revenue-to-GDP ratio has surged by almost 100 percent over three years, reversing previous sharp declines through increased revenue mobilisation, strict expenditure control, and maintained fiscal discipline.

The authorities are now leveraging this improved macroeconomic position to upgrade the country's sovereign creditworthiness. Dr Weerasinghe confirmed that discussions are currently underway with all three major international credit-rating agencies. Following progress in debt restructuring, the country has already transitioned out of the restricted-default category into speculative-grade territory, with officials optimistic about securing a further rating upgrade soon.

While the country remains below investment grade, a higher credit rating is expected to help rebuild international investor confidence and support a return to global capital markets. Central Bank officials emphasised that sustaining the recovery will require continued fiscal discipline, enduring reforms, and translating macroeconomic stability into long-term growth and resilience.