ALRIYAAN EXCLUSIVE: World Bank Projects Slowdown in Sri Lanka's Economic Recovery in 2025

Colombo, Dec - The World Bank has issued a warning that Sri Lanka's economic recovery is likely to slow down in 2025, with growth projected to ease to 3.5% - a significant downgrade from the modest rebound experienced in 2024.

According to the bank's latest Global Economic Prospects report, the deceleration is attributed to lingering structural weaknesses and global uncertainties that threaten to halt progress. The economic crisis that Sri Lanka faced in recent years continues to have a bearing on its growth prospects, alongside external challenges such as trade tensions, financial tightening, and climate-related disruptions.

In stark contrast to Sri Lanka, India and Bangladesh are expected to far outperform their southern neighbor: the former is forecast to grow at 6.3% in FY2025/26, while the latter is projected to expand by 4.9%. Pakistan, meanwhile, is also expected to experience slow growth of 3.1%.

Sri Lanka's sustained recovery from its economic crisis will now depend on several key factors - including structural reforms, improved debt management, and greater resilience to external shocks.

The World Bank has emphasized that regional economies continue to face significant downside risks due to these uncertainties, indicating the urgent need for policy intervention and strategic planning to mitigate the impact of global events on domestic economies.