News Today: Sri Lanka’s Economy Stabilized but Recovery Remains Fragile

The World Bank’s latest report, Opening Up to the Future, states that Sri Lanka’s economy has stabilized, with growth projected to reach 4.4% in 2024, surpassing earlier forecasts. This progress follows four quarters of growth driven by the industrial and tourism sectors, supported by key structural and policy reforms. However, the World Bank warns that the recovery remains fragile and dependent on maintaining macroeconomic stability, restructuring debt, and implementing reforms.

The report highlights the need for continued reforms to boost exports, attract foreign investment, and improve productivity. Sri Lanka’s untapped export potential is estimated at US$ 10 billion annually, which could create over 142,000 jobs. Enhancing female labor participation, addressing poverty, and tackling vulnerabilities in the financial sector are also essential for achieving sustainable growth.

The World Bank projects growth of 3.5% in 2025 but warns that the economic crisis’s scarring effects will limit growth in the medium term. Poverty is expected to remain above 20% until 2026.