Sri Lanka’s Economy Surpasses Expectations: ADB Reports Strong Growth

News Today: Asian Development Bank report reveals Sri Lanka’s economic growth

The Asian Development Bank (ADB) has reported that Sri Lanka’s economy outperformed expectations in Q1 2024. The GDP grew by 5.3% year-on-year (yoy), with industry expanding by 11.8%, services by 2.6%, and agriculture by 1.1%. Investments surged by 17.6%, while consumption growth remained modest at 0.5%. The ADB report credits easing inflation, improved raw material supply, and recovering export performance for the positive trends.

Despite challenges, Sri Lanka’s economic indicators signal strong recovery for the rest of 2024, supported by fiscal reforms, easing import controls, and improved foreign exchange liquidity. Growth projections for 2024 and 2025 have been revised upwards, although real GDP for 2025 remains below 2019 levels due to prior contractions. The current account continues to improve with tourism revenue up by 77.9% yoy, leading to better foreign reserves.

However, election-related delays in reforms could threaten the overall outlook. Sri Lanka’s agreement with major creditors and ongoing IMF-backed restructuring remain key to its financial stability. Any disruptions in this momentum could stifle growth and investor sentiment.