Sri Lanka’s economy has continued to show resilience amid successive shocks, but risks remain titled to the downside, the International Monetary Fund (IMF) said after completion of its seventh review of the External Fund Facility (EFF) and Article IV Consultation.

IMF staff and the Sri Lankan authorities held discussions relating to the Seventh Review of the IMF’s Extended Fund Facility (EFF), and the 2026 Article IV Consultation in the past two weeks.

“Discussions will continue in the near term toward reaching agreement on parameters and policies needed to conclude the Seventh Review,” the IMF said in a statement.

Mission Chief Evan Papageorgio said economy has grown for 11 consecutive quarter, inflationary expectations are broadly anchored despite over 8 percent in August, gross reserves have increased, banks remain capitalized, fiscal outturn for the first half of this year is strong, and debt structuring was “largely completed”.

“However, Sri Lanka continues to face downside risks from uncertainty over the duration and intensity of the Middle East war, global trade policy, and the impact of El Niño,” he said in a statement.

“Safeguarding macroeconomic stability in a shock-prone environment requires unwavering commitment to prudent policies and reforms to rebuild fiscal and external buffers, maintain price stability, and advance the governance agenda while strengthening social safety nets to protect the most vulnerable.”

“In this regard, it would be critical to develop and implement a medium-term revenue strategy to sustain revenue mobilization while improving the efficiency and fairness of the tax system. Steadfast efforts are needed to broaden the tax base and rationalize tax exemptions and incentives. Strengthening revenue administration would further improve tax compliance and support durable revenue gains.”

“Upholding cost-recovery energy pricing will help minimize fiscal risks arising from state-owned enterprises. It is also important to address bottlenecks to capital spending execution, including to accelerate cyclone Ditwah-related recovery and reconstruction.”

“Monetary policy should stand ready to address inflationary pressures and ensure price stability within the medium-term period in line with the flexible inflation targeting framework”.

” Greater exchange rate flexibility is key to absorbing shocks and supporting reserve accumulation. At the first statutory review, it would be prudent to maintain the 5 percent inflation target and the current accountability band. The current target preserves the flexibility Sri Lanka needs amid high food and energy price volatility, and once a track record of low and stable inflation is established, convergence toward a lower target could be considered at the next review,” he saiid.

Papageorgio said preserving the integrity of the anti-corruption legislative framework is critical to enhance public trust and said select clauses from the recently tabled amendments could weaken transparency and accountability.

“Shifting from stabilization to transformation requires sustained momentum on structural reforms to foster an enabling business environment and attract investment, including by liberalizing trade, modernizing business and labor regulations, broadening access to finance, and advancing digitalization. Ultimately, establishing a track record of sound policy and reform implementation will help strengthen resilience, durably restore confidence, and lift living standards through strong and inclusive growth as our research suggests.”

“The IMF team visited Jaffna and learned first-hand about the Northern Province’s economic potential. Discussions with the private sector and civil society highlighted opportunities to unlock growth and create jobs through investments in connectivity, skills, and sectors such as agriculture, fisheries, tourism, and renewable energy, while strengthening social protection so that the benefits of Sri Lanka’s economic transformation are shared more broadly.”

INDIA TODAY – Fifteen people convicted over Sri Lanka’s 2019 Easter Sunday suicide attacks will challenge their jail terms of more than 200 years each, a defence lawyer said on Wednesday. The attacks, carried out by nine suicide bombers from the local Islamist extremist group National Thawheed Jamaat, linked to ISIS, had targeted three Catholic churches and three luxury hotels on April 21, 2019.

Nearly 270 people, including 11 Indians, were killed in the bombings and more than 500 were injured. On Tuesday, a three-judge High Court Trial-at-Bar found 15 of the 24 accused guilty of involvement in the attacks and handed each of them prison terms of more than 200 years.

The bench comprised Judges Navaratne Marasinghe, Ramanathan Kannan and Sujeewa Nissanka. Defence counsel Kneel Maddumage, who appeared for seven of the accused, said the convictions and the record jail terms would be challenged in the Supreme Court after the relevant documents are received.

“Some of the defendants are not represented by counsel, but I requested on behalf of all the convicts that they be provided with copies of the proceedings to file their appeals,” Maddumage said.

Initially, 25 people were charged over their role in the bombings. After one of the accused died, 24 were indicted in October 2021. A total of 23,270 charges were brought against them, and 2,309 witnesses testified for the prosecution.

Catholic Church spokesman Father Jude Krishantha welcomed the verdict and said it had brought a sense of justice to the victims. “We feel satisfied because the relatives of those who died were expecting justice,” Krishantha said.

In July, former defence ministry bureaucrat Hemasiri Fernando and former police chief Pujith Jayasundara were sentenced to death for failing to act on prior intelligence that could have prevented the attacks. The bombings had triggered a political storm, with then President Maithripala Sirisena and then Prime Minister Ranil Wickremesinghe blamed for failing to prevent them despite prior intelligence being available.

A presidential panel appointed by Sirisena after the attacks later found the then president guilty of failing to prevent them, though Sirisena pleaded not guilty in the case filed after the panel’s findings. In 2023, Sirisena and the top defence hierarchy were also ordered to pay multiple millions of rupees as compensation to the families of the blast victims, as the case continues to shape accountability for the Easter Sunday attacks.

The Bar Association of Sri Lanka (BASL) has called on all political parties represented in Parliament to allow Members of Parliament to vote according to their conscience when theTwenty-Second Amendment to the Constitution Bill is taken up for consideration.

In a statement issued following the Supreme Court’s determination on the Bill, the BASL noted that the Court had ruled that the proposed amendment does not require approval by the people at a referendum.

The BASL stressed that the determination should not be interpreted as a judgment on whether the amendment represents good or bad policy, whether it is desirable or undesirable, or whether Parliament should ultimately enact it.

The Association pointed out that Sri Lanka’s constitutional history has seen numerous amendments that met constitutional requirements but nevertheless had adverse consequences for democracy, constitutionalism, judicial independence and the rule of law.

According to the BASL, the responsibility now rests entirely with Parliament and each individual Member of Parliament to decide whether the proposed amendment should be enacted.

In making that decision, MPs should carefully consider the possible and probable consequences of the amendment, as well as concerns regarding the lack of transparency and the absence of a comprehensive consultative process in its introduction.

The BASL urged all political parties to permit MPs to speak and vote freely on the amendment and stated that lawmakers should adopt a principled position based on their constitutional responsibilities, representative role and duty to the sovereign people of Sri Lanka.

The Catholic Church has welcomed the court verdict against those convicted in connection with the 2019 Easter Sunday attacks, but says the judgment should not be considered the end of efforts to uncover the full circumstances behind the bombings.

Speaking to reporters, Director of Mass Communications for the Archdiocese of Colombo, Rev. Fr. Jude Krishantha Fernando, said the Church was satisfied that a verdict had been delivered after victims and their families had waited for years for justice.

He said the judgment would also send a strong message against religious extremism, stressing that religion should never be distorted to justify violence.

However, Fr. Krishantha said those convicted represented only one part of the case and called for investigations to continue into whether others were involved in facilitating the attacks or allowing them to take place.

He alleged that intelligence and security officials had sufficient information to prevent the attacks but failed to act, and called for investigators to establish whether there was any wider involvement or motive behind that failure.

Previous official inquiries have examined the handling of advanced intelligence, while the Supreme Court has also ruled on fundamental rights petitions concerning failures by senior officials.

Fr. Krishantha also called for further legal action, where supported by evidence, against individuals identified in previous investigations and commission recommendations, saying the Church would consider the justice process complete only after all those responsible for the attacks and any related failures were properly investigated.

The Church has consistently called for investigations to identify whether there were additional individuals behind the attacks and for those responsible to be prosecuted.