Sri Lanka's economy grew 5% in 2024
Aruna Shantha
19-Mar-2025 06:48:11
Sri Lanka has posted a "remarkable" recovery from the crisis, the IMF said earlier this month, while approving the fourth tranche of $334 million under the programme.
Sri Lanka's economy grew 5% last year, official data showed on Tuesday, beating forecasts, and marking a strong rebound from the country's worst financial crisis in decades,
The economy grew 5.4% in the fourth quarter, the Census and Statistics Department said in a statement.
The International Monetary Fund had forecast Sri Lanka would grow by 4.5% in 2024.
Sri Lanka's agriculture sector grew 8.3% in 2024 from a year earlier, industrial output expanded by 25.5%, and services grew by 57.5%.
Struck by a severe dollar shortfall, the economy went into freefall in 2022, contracting 7.3% as it grappled with soaring inflation, a sharply weaker currency and a historic foreign debt default.
The economy shrank 2.3% in 2023.
But it made a stronger-than-expected recovery last year as measures implemented under a $2.9 billion four-year bailout from the IMF, secured in March 2023, bore fruit.
"Growth is significantly higher than any forecasts," Raynal Wickremeratne, co-head of research at Softlogic Stockbrokers, said, adding Sri Lanka's recovery has been swifter than expected.
"We hope tax collection and other measures remain steady... but government projections of 5% (growth) will be harder to reach this year, but not outside of the realm of possibility," Wickremeratne said.
The island nation also completed a $25 billion debt rework with bondholders and bilateral creditors including Japan, India and China, last December.
But the South Asian nation must now boost tax compliance, and implement other measures to support public finances and achieve a 2.3% primary surplus target, the IMF has said.
The IMF is projecting growth of 3% in 2025 and 2026.
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