Sri Lanka Records First Annual Economic Growth Post-Crisis in 2024

Sri Lanka’s economy grew by 5.0% in 2024, marking its first growth since the 2022 crisis. The last quarter showed a 5.4% expansion, reversing a contraction of 2.3% in 2023 and 7.3% in 2022. Key sectors contributed to this recovery, supported by IMF assistance and ongoing government reforms, indicating a positive economic trajectory ahead.

Sri Lanka’s economy has shown resilience by achieving a 5.0 percent growth rate in 2024, the first period of expansion following a severe economic crisis in 2022. Official statistics indicate that the last quarter of 2024 experienced a 5.4 percent growth, in stark contrast to a 2.3 percent contraction in 2023 and a significant 7.3 percent drop in 2022 due to acute foreign exchange shortages affecting essential imports.

The Department of Census and Statistics noted that sectors such as agriculture, industry, and services played crucial roles in supporting this positive economic trend. The nation’s economic decline in 2022 led to widespread protests and the eventual resignation of former President Gotabaya Rajapaksa. His successor, Ranil Wickremesinghe, emerged with a $2.9 billion four-year bailout from the International Monetary Fund (IMF), enacting austerity measures through increased taxes and reduced subsidies.

The current leftist administration, led by Anura Kumara Dissanayake, continues to uphold these austerity strategies. Recently, the IMF approved the fourth installment of the bailout package, highlighting that Sri Lanka’s program performance has been robust. IMF Deputy Managing Director Kenji Okamura stated that the ongoing reforms are yielding beneficial results, with expectations for continued economic recovery into 2025.

In summary, Sri Lanka’s economy rebounded in 2024, growing by 5.0 percent after a challenging period marked by substantial contractions. The involvement of key sectors in the growth, along with sustained reforms and successful IMF support, suggests a promising outlook for the future. The government’s commitment to fiscal discipline underpins this recovery, indicating potential for further economic stability and development.

Original Source: www.thenews.com.pk