Tag:World Bank

If Sri Lanka is to prevent a permanent underclass from forming in the wake of the 2022 crisis, economists argue that the focus must shift aggressively from mere stabilization to equitable growth.

For chronically loss-making enterprises that no longer serve clear strategic national interests, the study suggests eventual privatisation or orderly closure.

Sri Lanka has successfully navigated its way out of the darkest days of sovereign default, rebuilding a foundation of stability. However, as the World Bank’s latest assessment makes clear, this recovery remains deeply uneven.

At the international poverty line of $3 a day, an additional 1.4 million people are estimated to have slipped into poverty between 2022 and 2025 due to stagnant labour incomes and persistent inflation that eroded the benefits of whatever growth occurred.

As the two-week ceasefire takes effect, markets will be watching closely for signs of sustained de-escalation. Yet even if fighting subsides, the economic scars of the Iran war may take far longer to heal, the three organisations said.

Experts point out that recovery fund and planned reconstruction must also prioritise restoring agricultural capacity, irrigation and roads – because Sri Lanka’s food security and export-based economy depend critically on them.

In the meantime, civil society will likely continue pressing for accountability, especially in light of RTI-documented abuses.

Even as relief plans are underway, many warn that rebuilding will not just require bricks and mortar – but a renewed social contract that can lay the foundations for more inclusive and resilient growth.