Economy & Growth Economy & Market Policy

G-24 Warns of Rising Global Risks: Sri Lanka Among Economies Exposed to External Shocks

The Intergovernmental Group of Twenty-Four (G-24) has warned that escalating global risks, including geopolitical tensions, rising inflation, and tighter financial conditions could undermine fragile economic recoveries in developing countries such as Sri Lanka.

In a communiqué issued following its meeting on April 14, 2026, on the sidelines of the IMF-World Bank Spring Meetings in Washington, the G-24 emphasized that the global economy is facing renewed uncertainty, particularly due to the ongoing conflict in the Middle East and its spillover effects on energy prices and inflation.

The group noted that global growth is slowing while inflation pressures remain elevated, posing significant challenges for emerging and developing economies that are still rebuilding policy buffers after recent crises.

For countries like Sri Lanka, currently implementing an IMF-supported reform programme, the external environment presents additional headwinds, particularly through higher import costs, tighter financing conditions, and risks to remittances and tourism linked to global instability.

The G-24 stressed the urgent need for stronger international cooperation to support vulnerable economies, including enhanced access to concessional financing, timely debt restructuring, and reforms to the global financial architecture.

A key concern highlighted was the rising debt burden among developing nations. The group called for faster and more effective debt resolution mechanisms, noting that delays in restructuring could derail reform programmes and weaken recovery prospects.

Sri Lanka, which is undergoing a multi-year adjustment under an IMF Extended Fund Facility following its 2022 economic crisis, remains particularly sensitive to such global shocks. The IMF has already cautioned that external risks, including energy price spikes, could impact inflation and growth in the country.

The G-24 also urged multilateral institutions to play a stronger role in mobilizing climate finance and supporting sustainable development, warning that limited fiscal space in many countries is constraining their ability to invest in resilience.

Furthermore, the group called for reforms to make the global financial system more inclusive and responsive to the needs of developing economies, including greater representation and fairer access to resources.

As Sri Lanka continues its recovery path, the G-24’s message underscores the importance of sustained reforms alongside stronger global support to navigate an increasingly uncertain external environment.

source: Adaderana