COLOMBO, April 17 (Xinhua) -- Sri Lanka's economy will rebound in 2018 with annual growth averaging 4.5 percent in the medium term, according to a World Bank report released Tuesday.

In its latest biannual report titled "South Asia Economic Focus Spring 2018," the World Bank said the economic outlook in the island country remained favorable, provided the government was committed to the reform agenda of improving competitiveness, governance and public financial management.

It said Sri Lanka still faces several challenges that increasingly put its future economic growth and stability at risk, which must be addressed through macro and structural reforms.

Broadening and simplifying the tax base and aligning spending with priorities will help the government stay on course towards fiscal consolidation, the report added.