Reforms yield faster growth in Sri Lanka: World Bank

ECONOMYNEXT – After a slowdown last year, Sri Lanka is now benefiting from its efforts to improve its fiscal sustainability and to reform its economy, the World Bank has noted in a new report.

The island is projected to grow by 4.7 percent this year and by marginally over 5.0 percent in the medium term, according to the bank’s South Asia Economic Focus report.

Recent policy measures supporting fiscal consolidation and monetary tightening contributed to an improved outlook against the backdrop of the International Monetary Fund programme, it said.

“Despite a high budget deficit and public debt, signs of improvements in public finance were seen in 2016,” the report said.

“However, external buffers remained weak on account of a subdued export performance, low foreign direct investment and capital outflows.”

The World Bank said it is critical for Sri Lanka to expedite structural reforms to promote competitiveness and governance, and continue on fiscal consolidation in order to ensure sustained growth and development.
(COLOMBO, April 19, 2017)

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