Sri Lanka, Oct. 14 -- Sri Lanka must move away from debt-financed spending, tax concessions and import-intensive consumption to sustain its economic recovery, the Institute of Policy Studies of Sri Lanka (IPS) has said, calling for a growth strategy centred on private investment, productivity and competitive exports.

In its newly released Sri Lanka: State of the Economy 2026 report, titled Policy Choices for Durable Growth, the IPS said the country's next challenge was to accelerate economic growth without reopening the fiscal and external vulnerabilities that contributed to the 2022 economic crisis.

With limited fiscal and external space, the next phase of expansion must depend on stronger investment, a more competitive and diversified...