Publication:
Sri Lanka Development Update, April 2025: Staying on Track

Loading...
Thumbnail Image
Files in English
English PDF (2.49 MB)
104 downloads
English Text (75.91 KB)
7 downloads
Date
2025-04-23
ISSN
Published
2025-04-23
Author(s)
Editor(s)
Abstract
The Sri Lanka Development Update (SLDU) has two main aims. First, it reports on key developments over the past 12 months in Sri Lanka’s economy, places these in longer term and global contexts, and updates the outlook for Sri Lanka’s economy. Second, the SLDU provides a more in-depth examination of selected economic and policy issues. It is intended for a wide audience, including policymakers, business leaders, financial market participants, think tanks, non-governmental organizations and the community of analysts and professionals interested in Sri Lanka’s evolving economy. The report is based on published data available on or before March 18, 2025.
Link to Data Set
Citation
World Bank. 2025. Sri Lanka Development Update, April 2025: Staying on Track. © World Bank. http://hdl.handle.net/10986/43112 License: CC BY-NC 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Nepal Development Update, April 2025
    (Washington, DC: World Bank, 2025-04-08) World Bank
    The Nepal Development Update is produced twice a year to report on key economic developments that occurred during the year, placing them in a longer-term and global perspective. The Update is intended for a wide audience including policymakers, business leaders, the community of analysts and professionals engaged in the economic debate, and the general public.
  • Publication
    South Asia Development Update, April 2025: Taxing Times
    (Washington, DC: World Bank, 2025-04-23) World Bank
    Growth prospects for South Asia have dimmed. The global economic environment has become more challenging and is a source of heightened downside risks. After a decade of repeated disruptions, South Asia’s buffers to cushion new shocks are slim. Tackling some of its greatest inefficiencies and vulnerabilities could help South Asia navigate this unusually uncertain outlook: unproductive agricultural sectors, dependence on energy imports, pressures from rising global temperatures, and fragile fiscal positions. For most South Asian countries, increased revenue mobilization is a prerequisite for strengthening fiscal positions. Even taking into account the particular challenges of collecting taxes in South Asian economies—such as widespread informal economic activity and large agriculture sectors—South Asian economies face larger tax gaps than the average emerging market and developing economy (EMDE). This suggests the need for improved tax policy and administration. Until fiscal positions have strengthened, the burden of climate adaptation will disproportionately fall on the private sector. If allowed sufficient flexibility, private sector adaptation could offset about one-third of the likely climate damage by 2050. This may, however, require governments to remove obstacles that prevent workers and firms from moving across locations and activities. As growth prospects dim, the challenge grows to create jobs for South Asia’s rapidly expanding working-age population. South Asia’s large diasporas could become a source of strength if their knowledge, networks, and other resources can be better tapped for investment and trade.
  • Publication
    Maldives Development Update, April 2025
    (Washington, DC: World Bank, 2025-04-23) World Bank
    In 2024, economic growth remained robust with an estimated real GDP growth of 5.5%, primarily driven by a strong performance in tourism, which saw a 7.1% growth in the first three quarters. Tourist arrivals increased by 8.9% to a record 2.05 million. However, headline inflation surged in the last quarter, averaging 1.4% for the year, with food inflation remaining elevated at 6.6%. The fiscal deficit widened to MVR 12.7 billion (11.7% of GDP) due to increased expenditure, while revenue collection rose by 3.7%. The current account deficit (CAD) remained high, with the trade deficit widening to US$3.3 billion. Foreign exchange reserves fell to critically low levels but recovered to US$832.1 million by February 2025, supported by a currency swap agreement with the Reserve Bank of India. The financial sector's exposure to sovereign and state-owned enterprises (SOEs) debt increased, while credit growth to the private sector moderated. Public and publicly guaranteed (PPG) debt rose to US$9.4 billion (134.2% of GDP). Medium-term growth is projected to be 5.7% in 2025, supported by increased tourist arrivals due to the completion of a new terminal at Velana International Airport. Inflation is expected to rise, potentially increasing poverty unless targeted cash transfers are introduced. The fiscal deficit is likely to remain elevated, with public debt projected to rise to 135.7% of GDP by 2027. Significant downside risks include global trade uncertainties and elevated external and fiscal vulnerabilities. Urgent fiscal consolidation and a clear financing strategy are required to reduce vulnerabilities and ease liquidity pressures.
  • Publication
    Sri Lanka Development Update, April 2024: Bridge to Recovery
    (Washington, DC: World Bank, 2024-04-02) World Bank
    The Sri Lankan economy has shown early signs of stabilization with improved fiscal and external balances, supported by a recovery in remittances and tourism and the continued debt service suspension. However, this will be insufficient to reverse crisis-induced welfare losses as poverty levels remain elevated. The narrow path to restoring growth and prosperity will hinge on a successful debt restructuring, adequate support to the most poor and vulnerable, and continued reform implementation despite upcoming elections.
  • Publication
    Rwanda Economic Update, April 2025
    (Washington, DC: World Bank, 2025-04-01) World Bank
    Rwanda’s economy remained resilient in 2024, with GDP growth reaching 8.9 percent, driven by strong performances in services, industry, and a rebound in agriculture. Despite strong export growth, the current account deficit widened due to decline in official transfers. This necessitated continued reliance on forex inflows from FDI and external concessional borrowing. Inflation moderated, averaging 4.8 percent in 2024, due to lower food prices and tight monetary policy, allowing the central bank to ease interest rates by reducing the Central Bank Rate (CBR) from 7.5 percent to 6.5 percent in 2024. The fiscal position improved with higher tax collections supporting fiscal consolidation, though public debt is projected to peak at 80 percent of GDP in 2025, despite reduced borrowing needs, before gradually declining, driven by past deficits and exchange rate depreciation. Rwanda’s agriculture sector remains a cornerstone of the economy, employing 43 percent of the workforce and contributing 27 percent to GDP. Despite diversification beyond traditional cash crops like coffee and tea, agricultural productivity remains constrained by land fragmentation, limited mechanization, post-harvest losses, and climate change impacts. While agricultural exports account for 37 percent of total export revenues, trade remains vulnerable to price fluctuations, and regional market integration is underdeveloped. The sector has much more potential to deliver higher growth, better jobs and boost forex earnings. Part 2 of this report focuses on how to unlock this potential. It examines key drivers of agricultural productivity, including input use, irrigation expansion, mechanization, and digital innovation, while evaluating persistent challenges such as limited access to finance, weak extension services, and climate vulnerability. It assesses policy efforts under the Fifth Strategic Plan for Agriculture Transformation (PSTA5), which aims to modernize production, enhance market access, and transition toward a more private sector-driven model. Key recommendations include strengthening seed systems, expanding irrigation, investing in agro-logistics, improving financial access, and implementing regulatory reforms to attract private investment. By addressing these structural bottlenecks and aligning policies with regional and global trade opportunities in the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA), Rwanda can build a resilient, competitive, and sustainable agri-food sector that supports economic transformation and food security.

Users also downloaded

Showing related downloaded files

  • Publication
    Air Quality Management in Central Asia
    (Washington, DC: World Bank, 2025-05-02) World Bank
    This report aims to enhance the understanding of the priorities, needs, and solutions for improving air quality (AQ) in Central Asia (CA) through local action and regional collaboration. It focuses on key components of holistic air quality management (AQM): evidence-based analytics to identify the main sources of air pollution in CA, application of modern tools to assess the impact of cost-effective measures to improve AQ, assessment of the institutional and governance setup for AQM in CA with recommendations to strengthen it, and approaches to financing AQ improvement. Given the lack of comprehensive systematic and validated emission inventories of all PM2.5 precursor emissions, the technical assessment employs the regional emission inventory of the Greenhouse Gas - Air Pollution Interactions and Synergies (GAINS) model. Input data were updated for this study based on recent energy statistics and relevant national surveys. This report addresses emissions and the regional transboundary flows of pollution between Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. Subsequently, the resulting PM2.5 concentrations in ambient air throughout CA were computed with the atmospheric chemistry and transport calculations of the GAINS model. Employing the source apportionment results of the GAINS model, the analysis then examines the contributions to PM2.5 population exposure. The report also presents source apportionment analyses for important air pollution hot spots in CA: Dushanbe (Tajikistan), Bishkek (the Kyrgyz Republic), Tashkent (Uzbekistan), Samarkand (Uzbekistan), Astana, and Almaty (Kazakhstan).
  • Publication
    Resource-Backed Loans in Sub-Saharan Africa
    (World Bank, Washington, DC, 2022-02) Mihalyi, David; Hwang, Jyhjong; Rivetti, Diego; Cust, James
    This paper investigates the characteristics of resource-backed lending across Sub-Saharan Africa. To shed light on this type of lending, the paper presents new information on 30 resource-backed loans between 2004 and 2018, identified through publicly available information. These loans were concentrated in a few countries, where they represented a sizable fraction of all borrowing and were typically taken by central governments and state-owned enterprises. Although the loan terms are mostly opaque, where data are available, the study finds that such loans are not cheaper than regular loans. The paper highlights opportunities to transparency and offers some suggestions for improving the governance of collateralized borrowings across developing countries.
  • Publication
    Cities’ Partnership Initiative
    (Washington, DC: World Bank, 2025-04-24) World Bank
    Sustainable urban development is one of the key areas of development policy in Poland, which is in line with global trends. Sustainable urban development requires an integrated approach that takes into account the complexity and dynamics of phenomena and processes taking place in the urban environment. Meeting the challenges of urban development requires, on the one hand, a steady increase in the capacity of cities to plan and implement development projects, and on the other hand, a favorable regulatory and financial framework and support instruments that are an adequate response to the needs of urban centers. The Cities’ Partnership Initiative (CPI) is a flagship project of the Ministry of Development Funds and Regional Policy of Poland (MDFRP) aimed at supporting sustainable urban development. This final report is the third product of the Reimbursable Advisory Service Agreement on Sustainable Urban Development - Cities’ Partnership Initiative concluded between the MDFRP and the World Bank on January 28, 2022. The report summarizes the project work, including the results of the work of 30 CPI-participating cities, and presents conclusions and recommendations on the three thematic networks and the CPI formula itself.
  • Publication
    State of Social Protection Report 2025
    (Washington, DC: World Bank, 2025-04-07) World Bank
    Social protection goes well beyond cash transfers; it includes policies and programs that bridge skill, financial, and information gaps, aiding people in securing better jobs. The three pillars of social protection—social assistance, social insurance, and labor market programs—support households and workers in handling crises, escaping poverty, facing transitions, and seizing employment opportunities. But despite a substantial expansion over the past decade, 2 billion people remain uncovered or inadequately covered across low- and middle-income countries. Drawing from administrative and household survey data from the World Bank’s Atlas of Social Protection Indicators of Resilience and Equity (ASPIRE), the "State of Social Protection Report 2025: The 2-Billion-Person Challenge" documents advances and challenges to strengthening social protection and labor systems across low- and middle-income countries, analyzing the evolution of expenditure, coverage, and adequacy of support. This report details four policy action areas governments can embrace to maximize the benefits of adequate social protection for all: extending social protection to those in need; strengthening the adequacy of social protection support; building shock-proof social protection systems; and optimizing social protection financing. The report discusses how the path of reforms will depend on country context, capacity, and fiscal space. The rising frequency of shocks and crises calls for major investments in the adaptability and preparedness of social protection and labor systems. Amid a world in transition, social protection is more important and necessary than ever.
  • Publication
    World Bank East Asia and Pacific Economic Update, April 2025: A Longer View
    (Washington, DC: World Bank, 2025-04-24) World Bank
    East Asia and Pacific (EAP) outpaced most regions in economic growth in 2024. To sustain this momentum and generate jobs, EAP countries must navigate global uncertainty and tackle long-term challenges tied to shifting global integration, climate change, and demographic trends. In its 2025 Regional Economic Update, the World Bank projects that growth in EAP will slow down to 4.0 percent in 2025, compared to 5.0 percent in 2024. Uncertainty around these projections remains high, and growth outcomes will depend on global developments and national policy choices.