World Bank upgrades Sri Lanka’s 2024 growth forecast to 2.2% amid tourism rebound

The World Bank has updated its economic outlook for Sri Lanka, forecasting a modest expansion of 2.2% in 2024.

This revision represents a 0.5 percentage point increase from the bank’s January forecast. The latest projections are detailed in the World Bank’s “Global Economic Prospects” report, which attributes the improvement to a gradual rebound in tourism and remittances.

The report also forecasts continued growth in the coming years, with Sri Lanka expected to reach a 3% growth rate by 2026. However, the optimistic outlook depends heavily on successful debt restructuring negotiations and the implementation of structural reforms. These measures are essential to counteract the potential negative effects of planned fiscal consolidation efforts.

On a positive note, the report identifies stronger-than-expected economic activity in the United States as a potential upside risk for Sri Lanka. Increased economic activity in the U.S. could boost Sri Lankan exports and accelerate the nation’s growth trajectory. Additionally, progress in curbing global inflation might lead to an easing of monetary policy, reducing borrowing costs and improving the overall economic outlook for Sri Lanka.

While the revised forecast brings hope for the Sri Lankan economy, it underscores the importance of strategic financial and policy measures to ensure sustained growth and stability in the future.