SL economy will bounce back - World Bank

The latest World Bank Sri Lanka Development Update: Economic and Poverty Impact of COVID-19 has predicted that the economy will recover in 2021. Sri Lanka’s economic growth is expected to recover to 3.4 percent in 2021, mainly due to foreign investments as well as normalizing tourism and other economic activities.
Sri Lanka’s economy has contracted by 3.6 percent in 2020, the worst growth performance on record, as is the case in many countries fighting the pandemic.

 

The report points out that Government acted decisively acted to minimize the impact of Covid 19. Limitations on cash transfers, postponement of tax payments. introduction of a debt moratorium, and encouraging lending.

 

Meanwhile, the report notes that public and publicly guaranteed debt is estimated to have increased to 109.7 percent of GDP. Reserves have declined to an 11-year low in February 2021, and the exchange rate depreciated by 6.5 percent from January through March 17, 2021. Striking a balance between supporting the economy amid COVID-19 and ensuring fiscal sustainability remains a key challenge.