Agencies
one-fourth of cash-strapped Sri Lanka’s population, was living in poverty last year, despite the economy making a “remarkable recovery” from its worst financial meltdown, the World Bank said in its assessment on Wednesday.
The South Asian nation’s growth surpassed the bank’s forecast of 4.4%, recording 5.0% in 2024 – the first economic expansion since the 2022 crisis.
“While the economy is recovering, many Sri Lankans are still struggling ... the poverty rate remained alarmingly high at 24.5% in 2024,” the lender said in its latest update on the island.
“The labor market continues to struggle, leading to increased emigration as people look for opportunities abroad. Household incomes, employment and overall welfare remain well below pre-crisis levels.” The bank stated that wages have yet to return to their 2019 levels. Since then, poverty – measured by those earning less than $3.65 a day – has doubled.
The bank projected that growth would moderate in 2025 to 3.5%, partly due to global trade uncertainties triggered by the sharp increase in U.S. tariffs.
Sri Lanka defaulted on its foreign debt of $46 billion in April 2022 after running out of foreign exchange to finance imports such as food, fuel and medicines.
