Sri Lanka’s economy is likely to grow by 4.3% in the medium term if the government remains committed to its reform programme, it said. 

The Sri Lankan government has introduced a range of reforms aimed at improving competitiveness, governance and public financial management to boost growth.

These include broadening the revenue base, introducing a system to monitor government spending commitments and improving tax administration.

In 2017, the country’s fiscal revenue exceeded expenditure for the first time in decades, leading to a fiscal surplus.

Public spending is also only expected to increase as the country’s transition into a middle-income state advances, which puts pressure on pension and healthcare systems, the World Bank said.

“Sri Lanka’s march towards upper middle-income status and more and better jobs hinges on the economy’s competitiveness and its ability to pursue a private investment-tradable sector-led growth model,” said World Bank economist Ralph Van Doorn.

“A strong political will and support of bureaucracy could help advance the reform agenda.”

He praised the government’s work in introducing a number of reforms, including the draft Public Finance Act.

The Ministry of Finance in Sri Lanka said that this act will “formulate, develop, follow up, review, and update the systems and procedures in public financial management” to strengthen governance and improve accountability.