The Central Bank of Sri Lanka (CBSL) has announced that the country’s economy achieved a significant recovery in 2024, recording a 5% growth—the highest annual growth rate since 2017.
This growth, driven by strong performances across key sectors, marks a rebound from the economic challenges of recent years.
CBSL Governor Dr. Nandalal Weerasinghe highlighted the factors contributing to this recovery during the presentation of the CBSL’s Policy Agenda for 2025 and Beyond.
Following a strong recovery in the latter half of 2023, the economy benefitted from accommodative monetary policies, a low-inflation environment, and improved business confidence.
The 5.2% growth in the first three quarters of 2024 was sustained by expansions in the industrial and service sectors, which continued to drive momentum through the final quarter.
Dr. Weerasinghe noted that the growth dispels concerns over demand-related deflation, attributing the price declines instead to supply-side adjustments and administrative price controls. The overall stability in macroeconomic and financial sectors, achieved through decisive reforms, has created a foundation for resilience and sustained growth.
Key reforms included progress in public debt restructuring, successful collaboration with the International Monetary Fund (IMF) under the Extended Fund Facility (EFF), and regulatory enhancements to stabilize the financial sector.
Improved foreign exchange inflows and fiscal performance also strengthened external buffers, while inflation adjustments allowed for a continuation of eased monetary policy. The CBSL emphasized its commitment to supporting vulnerable groups through targeted fiscal measures.
“These achievements reflect the perseverance and sacrifices of all stakeholders, including the general public,” said Dr. Weerasinghe, adding that restored investor confidence has set the stage for long-term economic transformation.
Looking forward, CBSL’s agenda focuses on fostering sustained growth through structural reforms, enhancing productivity, and driving innovation.
While Sri Lanka’s recovery has outpaced other countries in similar crises, Dr. Weerasinghe stressed the importance of maintaining the current momentum. Sustained economic stability depends on the country’s commitment to reform and efforts to build buffers against future shocks.
The CBSL aims to continue safeguarding domestic price stability and financial system resilience while facilitating economic growth. Policies supporting sustainable finance, financial inclusion, and public debt management remain central to the bank’s future strategies.
Dr. Weerasinghe concluded by emphasizing the need to accelerate growth while preserving stability, as this would enhance the country’s debt-carrying capacity and unlock its long-term economic potential.
