Sri Lanka GDP: The World Bank has predicted a decline of 4.3 percent in the GDP of Sri Lanka, which is facing economic crisis this year. The global body has said in its update report that demand in Sri Lanka remains low, employment and income have declined and production has been severely affected by supply constraints.
What did the World Bank say in its report
The World Bank has said in its report that there is uncertainty in the country’s economy due to Sri Lanka’s monetary, foreign and financial imbalances and unstable political situation. The World Bank has emphasized on removing the root causes of economic crisis and building a strong economy to avoid such crises in future. Faris H Haddad-Jervos, World Bank Representative for Maldives, Nepal and Sri Lanka said, Sri Lanka has been deeply affected by the economic crisis. More than five lakh people have become unemployed and in the year 2021 and 2022, 27 lakh new people have come below the poverty line.
World Bank has listed these economic risks for Sri Lanka
He said, due to the impact of the prolonged economic crisis, slowness in loan restructuring, limited financial help from abroad and global uncertainty, there is a lot of risk to the country’s economic development.
These facts are good for Sri Lanka
The World Bank says that there will remain big challenges for the economy this year and in the coming years as well. An adverse foreign trade balance can affect domestic trade, economic activities, employment and income. Firmly implementing the government’s reform programs and receiving financial help from international partners will increase confidence and capital will start coming into the country and employment opportunities will be created again.
Sri Lanka facing biggest economic crisis since 1948
Sri Lanka is facing the biggest economic crisis since independence in 1948. Last month, it had received a bailout package of $2.9 billion from the IMF, which brought life to the country, which was in debt of billions of dollars. The Kovid-19 pandemic, rising fuel prices, mind-boggling tax cuts and over 50 per cent inflation have broken Sri Lanka’s back. The cost of living skyrocketed due to shortage of medicines, fuel and other essentials.
Sri Lanka defaults on debt obligations in May 2022
Distressed by all these developments, the public started demonstrating on the streets and last year overthrew the government of Gotabaya Rajapaksa. For the first time in the history of Sri Lanka, in May last year, Sri Lanka defaulted on debt obligations.