“A major factor that influences the economic outlook is the continuation of the IMF – Extended Fund Facility (EFF) arrangement and the progression of the envisaged structural reforms,” the central banks Monetary Policy Report issued in February said.

“Any disruption to this programme would create high economic costs to the country due to growth derailment, loss of confidence, and the protraction of negative investor sentiments.”

Sri Lanka has stabilized and economic activity is recovering the central bank said though growth would be subdued in the near term.