Sri Lanka’s economy grew by 5.0% in 2024, the first expansion since 2022’s crisis. The last quarter contributed 5.4% growth, following a contraction of 2.3% in 2023. Government reforms and an IMF bailout facilitated this recovery, with further growth expected in 2025.
In 2024, Sri Lanka’s economy experienced a growth of 5.0 percent, marking its first annual expansion following the severe economic crisis in 2022. Official data revealed that the last quarter of 2024 contributed an impressive 5.4 percent growth, in stark contrast to a contraction of 2.3 percent in 2023. The economic downturn was at its worst in 2022 when GDP decreased by 7.3 percent due to severe foreign exchange shortages that hindered essential imports, such as food and fuel.
The Department of Census and Statistics reported that the growth stems from contributions across agriculture, industry, and services sectors. Following significant shortages in early 2022 which incited widespread protests, the then-president Gotabaya Rajapaksa was ousted. His successor, Ranil Wickremesinghe, obtained a $2.9 billion bailout from the International Monetary Fund (IMF) in 2023 by implementing fiscal reforms, including tax hikes and subsidy cuts.
Anura Kumara Dissanayake’s leftist government, which took office in September, has preserved these fiscal austerity measures. Recently, the IMF released the fourth installment of the bailout, noting that Sri Lanka’s program performance “has been strong.” Kenji Okamura, the IMF’s deputy managing director, praised the achievements by stating, “Reforms in Sri Lanka are bearing fruit, and the economic recovery has been remarkable,” and indicated that continued recovery is anticipated into 2025.
Sri Lanka has recorded its first annual economic growth in 2024, following a series of challenges including significant declines in previous years. The growth, fueled by reforms and support from the IMF, is a positive indicator of recovery. As the economy continues to stabilize and expand, optimism for its future remains strong.
Original Source: www.thenews.com.pk
