Sri Lanka's economic recovery incomplete, urgent reforms needed, says World Bank

COLOMBO: Sri Lanka's recent economic performance has been strong, but the recovery remains incomplete, the World Bank said on Tuesday.

"With growth still below pre-crisis levels and poverty significantly elevated, strengthening the recovery will require continued macroeconomic stability, urgent structural reforms, and more efficient, better-targeted public spending," it said.

The current turnaround was aided by the four-year IMF bailout of nearly $3 billion pinned to a stringent reform regime.

"While Sri Lanka's recent economic progress is encouraging, the recovery is uneven and incomplete," said David Sislen, World Bank Division Director for Maldives, Nepal, and Sri Lanka. The World Bank projects Sri Lanka's economy to grow by 4.6% in 2025-supported by a modest rebound in industry and steady growth in services - before slowing to 3.5 per cent in 2026.