Connect with us

Economy

Sri Lanka’s Economy Stabilized – World Bank

Published

on

Sri Lanka’s economy has stabilized, with growth expected to reach 4.4 percent in 2024, surpassing earlier forecasts. This positive outlook follows four consecutive quarters of growth driven by the industrial and tourism sectors and supported by critical structural and policy reforms, says the World Bank.

Released today, the World Bank’s bi-annual Sri Lanka Development Update, titled Opening Up to the Future, cautions that the recovery remains fragile and hinges on maintaining macroeconomic stability, successfully restructuring debt, and continuing structural reforms to increase medium-term growth and reduce poverty. Key reforms aimed at boosting exports, attracting foreign investment, enhancing female labor force participation, improving productivity, and addressing challenges such as poverty, food insecurity, and vulnerabilities in the financial sector are crucial for achieving more inclusive and sustainable growth.

The report underscores the country’s potential for achieving higher and sustainable growth through trade. Sri Lanka has an untapped export potential estimated at $10 billion annually, which could create approximately 142,500 new jobs. There is significant opportunity for diversifying and expanding exports in manufacturing, services and agriculture, provided the necessary reforms are implemented.

“Sri Lanka’s recent economic stabilization, marked by four quarters of growth and a current account surplus in 2023, is a significant milestone,” said David Sislen, World Bank Regional Country Director for Maldives, Nepal, and Sri Lanka.  “At this moment, Sri Lanka has a real opportunity to realize its export potential, which we estimate at $10 billion annually. There is an opening for Sri Lanka to deepen its participation in global value chains and take advantage of its geography and an evolving global landscape to generate jobs and sustain growth. The continued implementation of important economic and governance-related reforms will allow Sri Lanka to fully benefit from this moment.”

Looking ahead, the report projects a modest growth of 3.5 percent in 2025. Growth is then expected to follow a modest path over the medium term due to the scarring effects of the economic crisis. Poverty is expected to gradually decline but remain above 20 percent until 2026. Inflation is likely to stay below the central bank’s target of 5 percent in 2024, gradually increasing as demand picks up. The current account is projected to remain in surplus in 2024, driven by tourism and remittances.

The Sri Lanka Development Update is a companion piece to the South Asia Development Update, a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges faced by countries in this region. The October 2024 edition, Women, Jobs, and Growthprojects growth of 6.4 percent in South Asia this year, making it the fastest-growing EMDE region in the world. Increasing women’s participation in the labor force and opening further to global trade and investment could help the region grow even faster and achieve its development goals, says the World Bank’s regional outlook.

Source – World Bank

Economy

Sri Lanka Govt to launch GovPay

Published

on

By

The initial step in the digitalisation of government services, ‘GovPay’, will be officially launched under the patronage of President Anura Kumara Disanayake on February 7th, 2025.

“This ground-breaking initiative will streamline and modernize how government institutions handle payments, enabling seamless transactions through a secure and efficient digital platform” President’s office said in a statement. 

Continue Reading

Economy

AKD Government revokes contentious 500 MW Adani wind power contract

Published

on

By

The Cabinet of Ministers chaired by President Anura Kumara Dissanayake has revoked a decision made by his predecessor Ranil Wickremesinghe in June last year to award a controversial 484 MW of wind power plants in Mannar and Pooneryn to Adani Green Energy SL Ltd.

The project was challenged on multiple grounds, including the arbitrary and excessive price of US cents 8.26 per kilowatt hour at a time when local bidders were offering prices as low as 4.88 cents.

Many environmental organisations, including the Wildlife and Nature Protection Society and Environmental Foundation Ltd., opposed the project owing to deficiencies in the Environmental Impact Assessment and because Mannar is a critical habitat for migratory birds. The local community, represented by the Bishop of Mannar too, vehemently opposed the project because of the harm to local industries and livelihoods.

In the course of his election campaign, the present President pledged to cancel the deal and call for international tenders to develop wind power in Sri Lanka. 

Consistent with that pledge, on 30 December the Cabinet decided “To revoke the cabinet decision dated 2024-05-06 numbered CP No. 24/0850/621/047 submitted by the then Minister of Power and Energy on ‘Proposal of Adani Green Energy SL Limited for the Development of 484 MW of Wind Power Plants in Mannar and Pooneryn.”

Biodiversity scientist Rohan Pethiyagoda, who for the last year fought tirelessly against the proposal award told the Daily FT: “Everyone interested in environmental integrity and financial transparency will celebrate the fact that President Dissanayake has delivered on his promise to defeat this conspiracy to defraud the people of Sri Lanka.” 

“Personally, I am delighted by this decision. But it is not enough. The Government must now release all the related files to the Bribery Commission and request a full investigation as to how this scam was perpetrated in the first place. Who was the mastermind behind it? Remember, the last Government agreed to buy electricity from Adani at a rate that was 70% higher than the locally tendered price. Into whose pockets was that 70% going? It added up to billions of dollars,” he said.

Commenting on the culture shift brought about by the NPP Government, Pethiyagoda said: “The degree of transparency we are now seeing is unprecedented. There was no song and dance from the NPP about this hugely consequential Cabinet decision. Instead, the attorney general routinely filed it in court as part of a 174-page submission that reads like something out of Wikileaks. This is a huge victory for environmental and social justice. Much kudos to AKD.”

Pethiyagoda also told the Daily FT that by the same decision, the Cabinet has appointed a new Project Committee and Procurement Committee to make recommendations regarding Adani’s proposal, but that that committee would be constrained by the President’s election pledge to invite international bids for the project. “It could be that the President is under pressure to give this project to an Indian company,” he said, “in which case it is likely that bids will be restricted to companies incorporated in India. Then, Adani too can compete in an open and transparent manner.”

Source – DailyFt

Continue Reading

Economy

BBC has named Sri Lanka one of the 25 Best Places to Travel in 2025

Published

on

By

Recognized by the BBC as the ninth destination on its prestigious list of “The 25 Best Places to Travel in 2025,” Sri Lanka continues to capture the imagination of travelers worldwide. 

The UK-based media powerhouse praised the island nation for its enchanting blend of natural beauty and cultural treasures, from mist-shrouded hilltop tea plantations and freely roaming wild elephants to ancient temples steeped in history and idyllic waves ideal for surfers.

Despite declaring bankruptcy in April 2022, Sri Lanka has demonstrated remarkable resilience under new leadership. The recently appointed President has focused on revitalizing the country after the dual challenges of a global pandemic and civil unrest. 

Tourism plays a pivotal role in this effort, with the country leaning on its breathtaking landscapes, vibrant culture, and storied heritage to attract global visitors.

Sri Lanka’s recovery narrative and diverse offerings—from serene beaches to lush, misty highlands—make it a destination that appeals to travelers seeking both beauty and inspiration in 2025.

Sri Lanka is aiming to attract an impressive 3 million visitors in 2025 and has started the year on a promising note, welcoming nearly 80,000 travelers within the first 10 days of January.

India and Russia have emerged as the leading source markets, contributing 11,749 (16.6%) and 11,629 (16.4%) arrivals, respectively, between January 1 and 9.

The United Kingdom ranked third with 5,520 visitors (7.8%), followed by Germany at 5,049 (7.1%), Australia with 3,055 (4.3%), and France contributing 2,714 (3.8%). Notably, January 2 and 3 stood out with impressive daily arrival figures of 9,392 and 8,974, respectively.

Meanwhile, Chinese arrivals, which are traditionally lower during the Lunar New Year as families celebrate at home, ranked seventh. However, a surge in connectivity with expanded routes by Chinese airlines is expected to boost these numbers in the coming months.

Source: TTW

Continue Reading
Advertisement

Trending