The International Monetary Fund’s decision to leave Sri Lanka out of the latest World Economic Outlook GDP projections highlights how fragile the country’s recovery still is, former ADB Institute research director Ganeshan Wignaraja said.
Speaking at a Strategic Dialogue organised by the Regional Centre for Strategic Studies (RCSS), Wignaraja noted that the April 2026 WEO carries blank spaces where Sri Lanka’s 2025-31 numbers should be, placing it in a “club” alongside conflict-affected places such as the Palestinian Territories, Syria, Lebanon and Afghanistan.
“Sri Lanka doesn’t have a number, you can look at that and there is no number. And I find that absolutely fascinating. Middle income country, 4,000 plus dollars a head… but no number for Sri Lanka,” he said. The IMF report itself states that data and projections for 2025-31 are excluded “owing to ongoing discussions on restructuring of sovereign debt.”
Wignaraja described the present uptick as a “cyclical recovery” driven by base effects from a collapsed economy and the relaxation of import controls, rather than new investment. The country still lacks the “stable economic foundation” needed to meet the heavy debt repayments due from 2028, he said, and the cost of living remains the primary pain point for citizens.
He pointed to the recent Treasury cyber theft and internal banking-sector frauds as significant blows to investor confidence. “Why would anyone want to invest in a country that has a cyber issue in their treasury?” he asked, noting that as a country in default Sri Lanka remains under intense scrutiny from rating agencies and global lenders.
To break out of a low-growth trap, Wignaraja called for “hardcore reforms in factor markets” — specifically land and labour — arguing that the country’s high number of holidays and “outmoded” labour laws were deterring multinationals from setting up manufacturing hubs. Without growth-enhancing reforms and deeper supply-chain integration with India, he warned, Sri Lanka risks returning to “the hospital” once the cushion of borrowed time runs out.
Source: EconomyNext.
