Global economic uncertainty has made central banking more complex, underscoring the need for stronger research capacity and greater collaboration, Central Bank of Sri Lanka Governor Dr. Nandalal Weerasinghe said. Speaking at the 14th Annual International Research Conference, he noted that the global economy is facing overlapping shocks driven by geopolitical tensions, rising protectionism, geoeconomic fragmentation, and rapidly changing trade and financial patterns. These conditions have complicated inflation forecasting due to recurring supply-side disruptions, while climate-related risks now need to be fully integrated into macroeconomic modelling, monetary policy, and financial sector oversight.
Dr. Weerasinghe said economic stabilisation now requires sound judgement, flexible policy frameworks, innovative analytical tools, and institutions capable of responding quickly to frequent and interconnected shocks. While global and domestic shocks such as trade disruptions, tariff changes, pandemics, and natural disasters are beyond control, he stressed that preparedness is not. Building resilience through strong external reserves, restoring fiscal space through revenue-based consolidation and state-owned enterprise reforms, strengthening well-capitalised financial institutions, and improving disaster-response mechanisms are critical to maintaining long-term stability and growth.
He also highlighted the importance of strong data, rigorous research, and evidence-based policymaking, noting that high-quality research improves forecasting accuracy and supports proactive and resilient policy decisions. In a world where economic shocks increasingly cross borders, Dr. Weerasinghe emphasised that cultivating a strong research culture and deepening collaboration are essential for modern central banking.
