World Bank forecasts Sri Lankan economy to grow 1.7% in 2024
By: Staff Writer
January 11, Colombo (LNW): The World Bank forecasts the Sri Lankan economy to grow by 1.7 percent in 2024 and by 2.4 percent in 2025, according to its report on global economic prospects made available to the local press on Wednesday.
According to the World Bank, the country’s economy is estimated to have recorded a negative growth of 3.8 percent in 2023.
Although the output in Sri Lanka is also estimated to have declined in the 2022-2023 financial year, progress has been made in sovereign debt restructuring, said the World Bank.
However, it said the outlook for Sri Lanka remains uncertain amid debt restructuring negotiations, particularly with private creditors.
The growth in South Asia is estimated to have slowed slightly to 5.7 percent in 2023, yet it remains the fastest among emerging markets and developing economy regions, according to the World Bank.
Sri Lanka is aiming to strike an elusive balance between reviving economic growth to positive 1.7 percent from negative 3.8 percent, alleviating the hardships faced by ordinary citizens and maintaining fiscal discipline in the election year.
The Government will be strengthening social safety nets by properly implementing welfare benefits Act 2002 update the social registry system to cover all welfare benefit schemes
Measures will be taken to strengthen social protection institutions, delivery systems, and targeting expenditure allocations to promote the utilisation of skills of the elderly, differently abled and widows as household entrepreneurs,
Till the voters elect the next government or the president in the middle of 2024 as scheduled, or earlier every move of the present government is to be more election-oriented a deviation from economic recovery measures taken so far, several economic analysts claimed.
Against this back drop, Sri Lanka continues to face severe economic, social and governance challenges despite signs of macroeconomic stabilisation with inflation moderating, exchange rate stabilising, and the Central Bank and Finance Ministry’s rebuilding reserves and fiscal buffers, they pointed out.
Government measures to address the balance of payment crisis, including tax reforms and cost-recovery pricing in the energy sector, have raised the cost of living while continued shortages of essentials, have been led to popular discontent.
The authorities aim to raise revenue by almost 45 percent in 2024 to Rs 4.81 trillion in 2024 , aided by taxes on international trade taxes on domestic goods and services. License taxes and other taxes on income and profit along with non-tax revenue and grants, finance Ministry data shows.
The total expenditure is estimated at Rs 7.82 trillion consists of primary expenditure Rs5,176 billion, recurrent Rs3,971 bn capital Rs1,205 bn and interest Rs 2.651 bn.