世界银行-斯里兰卡发展更新_2025年4月_保持正轨（英）-2025.4_36页_4mb

Sri Lanka Development Update 2025 Summary

Core Content

The Sri Lanka Development Update (SLDU) provides an overview of the country's economic recovery and outlines key policy challenges and opportunities for sustainable growth and poverty reduction.

Main Aims

1. Report on key economic developments over the past 12 months.
2. Place these developments in a longer-term and global context.
3. Update the economic outlook.
4. Provide an in-depth analysis of selected economic and policy issues.

Key Messages

• The economy has continued to recover, with growth, fiscal balances, and external buffers exceeding expectations in 2024.
• Household incomes, employment, and non-monetary welfare remain well below pre-crisis levels.
• Medium-term growth is expected to be modest, reflecting the scarring effects of the crisis, structural impediments, and global economic uncertainties.
• Poverty and vulnerability remain elevated, with the poverty rate estimated to be above 20 percent in the medium term.
• A more pro-poor recovery is needed to improve welfare and bring poverty rates back to pre-crisis levels before 2030.
• Downside risks are significant due to global headwinds, including slowing growth, trade policy uncertainty, and high interest rates.
• Upside risks exist from the successful implementation of structural reforms, particularly in trade and investment.

Context

• Sri Lanka emerged from its worst post-independence economic crisis, marked by sharp economic contraction, high inflation, and currency depreciation.
• The government implemented reforms under an IMF program, including cost-reflective utility pricing, new revenue measures, and monetary policy adjustments.
• The financial sector stabilized in mid-2023, supported by declining interest rates and improved economic conditions.
• The merchandise trade deficit widened in 2024, but the current account balance remained positive at 1.2 percent of GDP.
• Reserves increased to US$4.7 billion by end-2024, supported by a current account surplus, FX purchases, and debt restructuring progress.

Recent Developments

• Growth: Sri Lanka's economy grew by 5 percent in 2024, exceeding the October 2024 SLDU projection of 4.4 percent.
  • Industry rebounded at 11 percent, driven by construction activity.
  • Services grew by 2.4 percent, supported by tourism-related sectors.
  • Agricultural growth remained stagnant at 1.2 percent.
• Inflation: Headline inflation dropped significantly in 2024, reaching -4.2 percent in February 2025, driven by lower energy prices and currency appreciation.
• Monetary Policy: The Central Bank of Sri Lanka (CBSL) cut policy rates by 150 basis points in 2024, supported by improved investor sentiment and higher overnight liquidity.
• Financial Sector: Credit growth to the private sector increased to 10.7 percent in December 2024. NPLs declined to 12.6 percent of gross loans. However, credit risks remain high in tourism and construction.
• Debt Management: The fiscal deficit fell by 1.5 percentage points to 6.8 percent of GDP, supported by a primary balance surplus of 2.2 percent. Debt restructuring made progress, including agreements with Japan and the completion of a debt exchange with bondholders.
• Tax Revenue: The tax-to-GDP ratio increased sharply to 12.4 percent, driven by VAT collections and other reforms.
• Poverty and Vulnerability: Poverty remained above 20 percent in the medium term, with malnutrition increasing from 12.2 to 17 percent among children under 5. Vulnerability also rose, with a third of Sri Lankans at risk of falling back into poverty.
• Labor Market: Employment and real wages remain below pre-crisis levels, contributing to higher emigration rates. The employment rate declined to 45.2 percent in 2024.

Outlook

• Growth: The growth outlook is modest, projected at around 3.1 percent in the medium term, reflecting scarring effects and global uncertainties.
• Inflation: Inflation is expected to turn positive by mid-2025, but remain below the central bank's target of 5 percent.
• Current Account: The current account is projected to revert to a modest deficit in 2025 due to reduced export demand.
• Fiscal Pressures: Fiscal financing pressures will persist due to large T-bill refinancing needs.
• Structural Reforms: Continued implementation of reforms is critical for sustaining growth and poverty reduction.

Policy Watch

• Reforms Implemented:
  • Establishment of the Public Debt Management Office.
  • Recapitalization of state-owned banks.
  • Recertification of Aswesuma beneficiaries.
  • Publication of a Governance Action Plan for 2025.
• IMF EFF Review: The third review of the IMF Extended Fund Facility (EFF) was completed in February 2025, supporting reform momentum.
• 2025 Budget Focus:
  • Promoting export-led growth.
  • Strengthening governance and legal frameworks.
  • Boosting competitiveness through new legislation.
• Key Reforms Proposed:
  1. Macro-Fiscal-Financial Stability:
     • Public Procurement Act.
     • Law on Exchange of Information between State Institutions.
     • Rescue, Rehabilitation, and Insolvency Act.
     • Revised Micro Finance and Credit Regulatory Authority Act.
  2. Boosting Competitiveness:
     • Revised Economic Transformation Act (ETA) and Investment Protection Act (IPA).
     • Public Private Partnership (PPP) Investment Management Act.
     • State Business Enterprises Management Act.
  3. Reducing Inward Orientation:
     • National Export Development Plan (2025-2029).
     • National Tariff Policy.
     • New Customs Law.
     • Trade National Single Window.

Downside and Upside Risks

• Downside Risks:
  • Global growth is expected to slow in 2025 and 2026.
  • Trade policy uncertainty and high interest rates may limit capital inflows and discourage investment.
  • Inequitable fiscal consolidation and limited external financing support pose risks.
  • Policy uncertainty and further scarring effects may slow recovery.
  • Reliance on regressive indirect taxes could worsen the poverty outlook.
• Upside Risks:
  • Successful implementation of structural reforms, particularly in trade and investment, could boost growth and attract non-debt-creating flows.

Conclusion

Sri Lanka's economy has shown resilience and recovery in 2024, with improved macroeconomic stability and debt restructuring. However, the recovery remains uneven, with household incomes, employment, and welfare lagging behind pre-crisis levels. Continued structural reforms, macroeconomic stability, and pro-poor policies are essential to ensure sustainable growth and poverty reduction. Global economic uncertainties and domestic challenges pose significant risks to the medium-term outlook, necessitating a coordinated and inclusive policy approach.