The World Bank said that Sri Lanka’s economy is making tremendous progress and the country from a negative growth rate a few months ago will stamp a positive 2.2% growth in the entire year of 2024.
“This will then stabilise to 3% from 2025 onwards and we see implementation of reforms as the key to this positive momentum which should continue in the future as well,” said Senior World Bank Economist Richard Miller in Colombo yesterday.
He also said that increase in remittances, tourist arrivals and increase of donor funds too played a key role towards this recovery.
He recalled that the country has made great progress when it comes to increasing reserves from around US$ 300 million which was sufficient for one week of purchases to over US$ 3.5 billion in nine months and similarly reducing the inflation from one of the world’s highest 70% to less than 5% during the same time frame.
“In addition, interest rates too have drastically come down while the Sri Lankan Rupee has stabilised.
“While the reform process must continue more steps should be taken towards state owned enterprise reforms, reducing corruption and mainly addressing poverty that is increasing,” World Bank’s Country Manager for Maldives and Sri Lanka, Chiyo Kanda said.
“Steps should also be taken to reduce income inequality and labour market concerns.
While releasing the Sri Lanka Development Update, Bridge to Recovery, report World Bank Country Director for Maldives, Nepal and Sri Lanka Faris Hadad-Zervos said: “Sri Lanka’s economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms.”
“This involves a two-pronged strategy: first, to maintain reforms that contribute to macroeconomic stability and second, to accelerate reforms to stimulate private investment and capital inflows, which are crucial for economic growth and poverty reduction.”
Shirajiv Sirimane