Sri Lanka's Economy Shows Signs of Recovery - World Bank

COLOMBO (News 1st); The World Bank has revised its economic outlook for Sri Lanka, projecting a modest expansion of 2.2% in 2024.

This marks a positive shift, up 0.5 percentage points from their January forecast. The improvement is attributed to a gradual rebound in tourism and remittances.

The report, titled "Global Economic Prospects," predicts further growth in the coming years, with Sri Lanka reaching a projected 3% by 2026.

However, this optimistic outlook hinges on successful debt restructuring negotiations and the implementation of structural reforms.

These measures are crucial to offset the potential negative impact of planned fiscal consolidation efforts.

On the positive side, the report identifies stronger-than-expected economic activity in the United States as a potential upside risk for Sri Lanka.

This could lead to increased exports and a faster growth trajectory. Progress in curbing global inflation could pave the way for an easing of monetary policy, ultimately reducing borrowing costs and improving the overall economic outlook.