COLOMBO (AP) – The economic situation in debt-stricken Sri Lanka has started to gradually improve following its worst economic crisis two years ago, the International Monetary Fund (IMF) said on Thursday.
Inflation has come down from a peak of 70 per cent in 2022 to 5.9 per cent last month and the country’s economy expanded in the second half of last year following a year and a half of contraction, the IMF said.
Sri Lanka’s year-on-year economic expansion in the third quarter of 2023 was 1.6 per cent and in the fourth quarter 4.5 per cent, the IMF said.
The economic crisis in early 2022 left Sri Lankans suffering from severe shortages of food, medicine, fuel and power, drawing strident protests that led to the ouster of then-President Gotabaya Rajapaksa.
The Indian Ocean island nation declared bankruptcy in April 2022 with more than USD83 billion in debt – more than half of it to foreign creditors.
Sri Lanka turned to the IMF for help to rescue the economy and secured a bailout package last year. Under the current four-year bailout programme, the IMF is to disburse USD2.9 billion in tranches after biannual reviews of whether the country is imposing needed economic reforms.
