By The World Bank forecasts a slow economic recovery for Sri Lanka, with 1.7% growth in 2024 and 2.4% in 2025.
2023 saw a negative growth of 3.8%, but progress has been made in debt restructuring.
The outlook remains uncertain, especially regarding private creditor negotiations.
The government wants to revive growth, ease public hardship, and maintain fiscal discipline before elections.
Strengthening social safety nets and boosting revenue are planned.
Despite stabilizing indicators, shortages and cost of living increase discontent.
Critics fear election-driven actions may deviate from economic recovery efforts.
Analysis
Sri Lanka faces a delicate balancing act. It needs to revive the economy after a disastrous 2023, but must also address public suffering caused by inflation and shortages. Additionally, upcoming elections create political pressure to prioritize populism over long-term recovery measures.
The World Bank report offers cautious optimism, with projected gradual growth. However, success hinges on successful debt restructuring and overcoming lingering uncertainties.
