Sri Lanka has welcomed figures showing that the economy expanded significantly faster than predicted in the first quarter, as the country continued to emerge from a crushing foreign exchange crisis.
The 5.3 percent expansion in January-March exceeded the preceding three months and was a significant improvement over the 10.7 percent contraction in the same quarter last year. In addition, it outperformed Bloomberg News’s projection of 4.0 percent.
On Monday, Deputy Finance Minister Ranjith Siyambalapitiya stated that the government expects an overall annual growth rate of around 2.2 percent in 2024.
“It is remarkable that we were able to achieve positive growth two years after facing the worst economic crisis ever,” he remarked in a press release.
The official data revealed a remarkable comeback in the industrial sector, with 11.8 percent growth in the first quarter compared to a 24.3 percent contraction in January-March 2023.
The building sector also showed progress, with inflation falling from a high of 70% in September 2022 to 0.9% in May.
The International Monetary Fund released $336 million last week as part of a four-year $2.9 billion rescue for Sri Lanka, which defaulted on its $46 billion foreign debt in April of 2022.
Protesters stormed the mansion of then-President Gotabaya Rajapaksa, forcing him to resign. To boost state revenue, his successor, Ranil Wickremesinghe, has quadrupled taxes, eliminated significant energy subsidies, and boosted vital commodity prices.
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