SRI LANKA’S ECONOMIC RECOVERY
While prices remain inflated, they are a far cry from the peak of 70 per cent. Inflation has currently settled at about 1.7 per cent.
Sri Lanka’s gross domestic product (GDP) grew over the last three quarters, after contracting by double digits at the height of the crisis.
Mr Sabry pointed out that Sri Lanka has done “remarkably well”, going from a double-digit recession to a 5.3 per cent increment.
“Tourists are coming back. The Sri Lankan rupee has strengthened about 20 per cent … And also our reserves have come up. And for the first time after six years, we have a primary account balance. So all the indicators are in the right place,” he said during the wide-ranging interview.
However, World Bank estimates show that poverty has doubled since 2021, with a quarter of the population living below the poverty line.
Acknowledging that this vulnerable segment of the population is further affected by the inflation, Mr Sabry said the government has tripled the direct cash transfers provided to those who live below the poverty line – about 2 million families.
“(The) idea is right now to protect the most vulnerable, spur growth and have it sustainable over a period of time so that the economy will be back on track, ever to fall into a situation like we faced two years ago,” he said.
Sustainable growth without hurting the poor disproportionately requires the country to fight corruption, improve the efficiency in services and bridge the digital divide, he said.
Sri Lanka also has to invest money into areas that can sustain the economy such as renewable energy, bond development and making the country a maritime and air traffic hub, Mr Sabry added.
