• Economy stabilized faster than expected, but country not out of the woods yet

By Kelum Bandara  

Asserting that Sri Lanka’s economy stabilized at a rate faster than expected, a top World Bank official said yesterday that the country is not yet out of the woods and there is no magic or silver bullet other than hard work and consistency for future growth.  

Gevorg Sargsyan, the World Bank Group Country Manager for Sri Lanka, told journalists that stabilization of the economy faster than expected was the good news, but the fact that the country is not yet out of the woods is the ‘not so good news’.   

 He said nearly 25 percent of people live in poverty and there are millions of others a short distance away from poverty.  

According to the World Bank, Sri Lanka’s economy has stabilized, with growth expected to reach 4.4 percent in 2024, surpassing earlier forecasts. This positive outlook follows four consecutive quarters of growth driven by the industrial and tourism sectors and supported by critical structural and policy reforms according to the World Bank.  

Mr. Sargsyan made these remarks at the release of the World Bank’s bi-annual Sri Lanka Development Update, titled Opening Up to the Future.  

The World Bank cautions that the recovery remains fragile and hinges on maintaining macroeconomic stability, successfully restructuring debt, and continuing structural reforms to increase medium-term growth and reduce poverty. Key reforms aimed at boosting exports, attracting foreign investment, enhancing female labour force participation, improving productivity, and addressing challenges such as poverty, food insecurity, and vulnerabilities in the financial sector are crucial for achieving more inclusive and sustainable growth.