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The South Asian nation forecasts a blistering 8.0 percent growth this year, the biggest in nearly three decades, despite soaring violence that has claimed more than 1,500 lives since last December.
"The economy has shown resilience so far, but prolonged uncertainty would affect business confidence and macroeconomic performance," Wanda Tseng, the IMF's deputy director for Asia-Pacific, said during the International Monetary Fund and World Bank annual meetings here.
Sri Lanka's Central Bank, which is forecasting a growth rate of seven to eight percent this year on the back of a 7.9 percent growth rate in the first half of the year, did not factor in the prospect of full-scale war.
Sri Lanka's Oslo-arranged 2002 truce is under severe strain following a new surge in violence but peace broker Norway expects to bring the Sri Lankan government and the rebel Liberation Tigers of Tamil Eelam (LTTE) to the negotiating table early next month.
"There is no choice for Sri Lanka, but to pursue peace," t