Economy

Sri Lanka’s Economy Stabilized – World Bank

Published

2 years ago

October 10, 2024

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 Growth, projects 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’s exports surpass US$ 5.7b in first four months of 2026

Published

15 hours ago

May 25, 2026

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Sri Lanka’s total exports, comprising both merchandise and services, reached US$ 1,380.93 million in April 2026, recording a year-on-year growth of 6 % compared to April 2025.

According to provisional data released by Sri Lanka Customs, together with estimated figures for Gems & Jewellery and Petroleum Products, merchandise exports in April 2026 increased by 9.87% to US$ 1,063.77 million.

Earnings from services exports were estimated at US$ 317.16 million in April 2026, underscoring the growing importance of the services sector in driving Sri Lanka’s overall export performance.

On a cumulative basis, total exports for the period January to April 2026 are estimated at US$ 5,784.38 million, reflecting a growth of 4.3 % over the corresponding period in 2025.

Overall, the positive export performance recorded during the first four months of 2026 highlights the resilience of Sri Lanka’s external sector. Sustained export earnings, supported by stable merchandise trade and the growing contribution of services exports, indicate a steady and encouraging recovery trajectory for the Sri Lankan economy in 2026.

Economy

Sri Lankan Rupee becomes best performing Asian currency

Published

1 day ago

May 25, 2026

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In remarkable turnaround of events for the Sri Lankan rupee, respected financial news agency Bloomberg said the currency has surged against the dollar, snapping a nine-day losing streak to become Asia’s best-performing currency on Friday.

Bloomberg reported that the rupee strengthened as much as 2.7%, its biggest gain since March 2023, reversing losses from Thursday when it slid to a three-year low.

Data from the Central Bank of Sri Lanka (CBSL) show the extent of the panic that gripped Sri Lanka’s foreign exchange market last week, with the rupee’s year-to-date (YTD) depreciation against the US dollar accelerating sharply within days as importers rushed to secure dollars while exporters delayed conversions.

According to CBSL Weekly Economic Indicators data, the rupee’s YTD depreciation stood at 4.5% by 15 May before surging to 7.2% by 22 May, marking the sharpest deterioration in the currency so far this year.

The movement came amid heightened market anxiety over the economic fallout from the Middle East conflict and fears of rising global energy prices.

The rupee appreciated on Friday after the CBSL moved to calm a nervous foreign exchange market following sharp depreciation earlier in the week.

Economy

Sri Lankan rupee ranked Asia’s worst-performing currency

Published

5 days ago

May 21, 2026

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The Sri Lankan rupee has been identified as the worst-performing currency in Asia this month, according to a report published by a leading global business news platform.

The report stated that the Sri Lankan rupee had weakened significantly against the US dollar in recent days and warned that the currency could depreciate further.

Commenting on the situation, Professor Wasantha Athukorala of the Department of Economics and Statistics at the University of Peradeniya said the rapid depreciation of the rupee within a short period posed a serious risk to the country’s economy.

He warned that inflation could rise sharply in the future if urgent measures were not taken to control the situation.

Meanwhile, Member of Parliament Ravi Karunanayake claimed that the current government had no proper mechanism in place to prevent the rupee from depreciating further.

Former MP Piyal Nishantha also stated that both the government and opposition should work together to take immediate action to address the prevailing economic crisis.

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