April 7, 2023
2 mins read

World Bank: Sri Lanka’s economy to contract by 4.3%

Sri Lanka’s heightened fiscal, external, and financial imbalances and its fluid political situation pose significant uncertainty for the country’s economic outlook…reports Asian Lite News

Amid the ongoing economic crisis, the Sri Lankan economy is projected to contract by 4.3 per cent in 2023 as demand continues to be subdued, job and income losses intensify, and supply-side constraints adversely affect production, the World Bank announced.

Sri Lanka’s heightened fiscal, external, and financial imbalances and its fluid political situation pose significant uncertainty for the country’s economic outlook, the World Bank said in its twice-a-year update, underscoring the need to address the root causes of the country’s economic crisis and build a strong and resilient economy to prevent future crises, reports Xinhua news agency.

“The economic crisis in Sri Lanka has had deep impacts with over half a million jobs lost and 2.7 million additional people falling into poverty between 2021 and 2022,” said Faris H. Hadad-Zervos, World Bank country director for Maldives, Nepal, and Sri Lanka.

“The prolonged recovery from the scarring effects of this crisis in addition to a slow debt restructuring process, limited external financing support, and an uncertain global environment pose significant risks to the country’s economic growth,” the country director said.

The economy will continue to face significant challenges in 2023 and beyond, and a lower-level external trade equilibrium could have contagion effects on domestic trade, economic activity, jobs and incomes, according to the World Bank.

Strong and effective implementation of the government’s reform program, supported by financing from international partners, could boost confidence and attract fresh capital inflows that are key to improving job prospects and restoring livelihoods, said the World Bank.



As Sri Lanka is still undergoing its worst ever economic crisis since independence in 1948, the island nation last month had finally secured a $2.9 billion bailout from the International Monetary Fund (IMF), which came as a lifeline for the island nation that has billions of dollars in loans.

The Covid-19 pandemic, rising energy prices, populist tax cuts and inflation of more than 50 per cent has battered Sri Lanka.

A shortage of medicines, fuel and other essentials also pushed the cost of living to record highs, triggering violent nationwide protests which overthrew the Gotabaya Rajapaksa government in 2022.

As a result the country defaulted on its debts with international lenders last May for the first time in its history.

ALSO READ: ADB: Lanka’s gradual recovery expected next year

Previous Story

Budget session marred by low productivity

Next Story

Lanka to finalise talks with creditors before 1st IMF review

Latest from -Top News

WUC Intensifies Global Call for Uyghur Justice

WUC delegation undertook a week-long advocacy tour in Germany, where it met with Turkish NGOs and community leaders….reports Asian Lite News The World Uyghur Congress (WUC) has published its monthly brief, strengthening

India Urges Bangladesh to Act on Minority Attacks

MEA spokesperson Randhir Jaiswal urged the Yunus government to probe extremist attacks on minorities….reports Asian Lite News India on Friday criticised recent comments by Bangladesh’s Home Advisor Jahangir Alam Chowdhury, asserting that

Jaffar Express Targeted Yet Again

blast happened at a distance of one kilometre from the Sultan Kot railway station….reports Asian Lite News At least seven injured as blast hits Quetta-bound Jaffar Express in Sindh’s Shikarpur district. Shikarpur

India to Join G20 Energy Talks in South Africa

The meeting is being hosted under South Africa’s G20 Presidency in the country’s KwaZulu Natal province…reports Asian Lite News Union Power Minister Manohar Lal will represent India at the G20 Energy Transitions
Go toTop

Don't Miss

Postal voting begins for Sri Lanka’s parliamentary election

The Election Commission added that postal voting would continue on

Ex-President Sirisena quizzed by anti-graft commission on pardon 

Sirisena, who served as president from 2015 to 2019, issued