Sri Lanka's economy shows surprising recovery in 2024

Sri Lanka's economy is showing signs of recovery, with the World Bank revising its growth forecast for 2024 to 4.4 percent, up from 2.2 percent. This improvement is attributed to a rebound in tourism, financial services, and construction sectors. However, the growth rate remains below the South Asia regional average of 6.4 percent. The World Bank warns that the recovery is fragile and depends on the country's ability to maintain stability and complete the restructuring of its external debt. The new government, led by President Anura Kumara Dissanayake, is navigating the aftermath of a severe economic crisis that led to widespread protests and a change in leadership. The administration is working with the International Monetary Fund (IMF) on a $2.9 billion bailout while seeking to renegotiate some austerity measures. The economic crisis has significantly increased poverty levels, with 25.9 percent of the population living on less than $3.60 a day in 2023, nearly double the pre-crisis figure. The World Bank anticipates that poverty will remain high in the coming years, highlighting the need for continued reforms to foster medium-term growth and alleviate poverty.