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World Bank forecasts modest growth for Sri Lanka's economy in 2024
(MENAFN) Sri Lanka's economy is anticipated to experience modest growth of 2.2 percent in 2024, signaling a positive shift towards stabilization following the significant economic downturn witnessed in 2022, according to the latest bi-annual update from the World Bank released on Tuesday.
Despite these positive indicators, the country continues to grapple with persistent challenges such as elevated poverty levels, income inequality, and labor market uncertainties, as highlighted in the update.
While Sri Lanka has observed a decline in inflation and a surge in revenues attributed to the implementation of new fiscal policies, one notable achievement is the attainment of a current account surplus for the first time in almost five decades.
However, amidst these improvements, concerns persist regarding the socio-economic landscape. Poverty rates have continued to climb for the fourth consecutive year, with approximately 25.9 percent of Sri Lankans estimated to be living below the poverty line in 2023.
Moreover, there has been a concerning decline in labor force participation, particularly among women and in urban areas. This decline has been exacerbated by the closure of micro, small, and medium-sized enterprises, further exacerbating existing challenges within the labor market. Addressing these socio-economic disparities remains a crucial priority for Sri Lanka's sustainable development agenda moving forward.
"Sri Lanka's economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms," Faris Hadad-Zervos, who serves as the World Bank's country director for Maldives, Nepal, and Sri Lanka, stated.
Despite these positive indicators, the country continues to grapple with persistent challenges such as elevated poverty levels, income inequality, and labor market uncertainties, as highlighted in the update.
While Sri Lanka has observed a decline in inflation and a surge in revenues attributed to the implementation of new fiscal policies, one notable achievement is the attainment of a current account surplus for the first time in almost five decades.
However, amidst these improvements, concerns persist regarding the socio-economic landscape. Poverty rates have continued to climb for the fourth consecutive year, with approximately 25.9 percent of Sri Lankans estimated to be living below the poverty line in 2023.
Moreover, there has been a concerning decline in labor force participation, particularly among women and in urban areas. This decline has been exacerbated by the closure of micro, small, and medium-sized enterprises, further exacerbating existing challenges within the labor market. Addressing these socio-economic disparities remains a crucial priority for Sri Lanka's sustainable development agenda moving forward.
"Sri Lanka's economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms," Faris Hadad-Zervos, who serves as the World Bank's country director for Maldives, Nepal, and Sri Lanka, stated.
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