Sri Lanka's economy records first growth after debt default
Sri Lanka's economy has shown signs of growth in the September quarter, marking a significant turnaround since the nation faced a debt default due to a foreign exchange shortage last year, as stated by the country's central bank on Saturday.
According to the Central Bank of Sri Lanka, the economy expanded by a modest 1.6 percent in the quarter ending September, a notable improvement from the 11.5 percent contraction reported a year earlier.
This growth is attributed to advancements in the transport, services, and agriculture sectors, as outlined in the bank's statement.
However, despite this positive development, cumulative data for the initial nine months of the year indicated an overall contraction of 4.9 percent.
The International Monetary Fund (IMF) has projected a negative 3.6 percent full-year GDP growth for Sri Lanka in 2023. Despite releasing a second tranche of 337 million US dollar as part of a 2.9 billion dollar bailout package, the IMF cautioned that although Sri Lanka displayed signs of economic stabilization, it remained in a precarious position.
The country, inhabited by 22 million people, experienced a continuous economic decline for nine consecutive quarters starting from the third quarter of 2021.
Facing a dire foreign exchange shortage to finance crucial imports such as food, fuel, and medicine, Sri Lanka defaulted on its $46 billion external debt in April last year, precipitating a significant financial crisis.
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