Island Nation Surpasses Economic Expectations

The South-Asian island nation of Sri Lanka has seen its economy grow more than 5% last year, beating forecasts and rebounding strongly from the country’s worst financial crisis in decades.

“Growth is significantly higher than any forecasts,” states Raynal Wickremeratne, co-head of research at Softlogic Stockbrokers. “We hope tax collection and other measures remain steady[…] Government projections of 5% (growth) will be harder to reach this year, but not outside of the realm of possibility.”

According to Sri Lanka’s Census and Statistics Department, the country’s economy grew 5.4% in the fourth quarter, beating the International Monetary Fund (IMF) forecasts of 4.5% growth in 2024. The agriculture sector grew 8.3%, industrial output expanded by 25.5%, and services grew by 57.5%. Sri Lanka made a stronger-than-expected recovery in 2024, thus encouraging the IMF to approve the fourth tranche of $334 million under the $2.9 billion four-year bailout secured in 2023. The IMF projects a 3% growth in 2025 and 2026.