Sri Lanka’s economy expanded by 5.5% in the third quarter of 2024, providing a much-needed boost as the nation races to finalize a crucial debt restructuring plan, Bloomberg reports.
This latest growth figure surpasses the 4.7% recorded in the previous quarter and comes as authorities announced that dollar bondholders have expressed support for a proposed debt swap.
The positive economic data arrives as Sri Lanka recently received $333 million in financing as part of a larger $3 billion International Monetary Fund (IMF) bailout package. While this injection of capital offers vital support for the island nation’s struggling economy, its disbursement remains contingent on Sri Lanka meeting specific conditions, most critically, the successful completion of debt restructuring negotiations.
President Anura Kumara Dissanayake reaffirmed the government’s commitment to the IMF program on November 21st, emphasizing the need for economic stability given the country’s fragile state. The government aims to conclude the restructuring of approximately $12.6 billion in debt by the end of this month. This milestone is considered essential for restoring Sri Lanka’s access to international financial markets, a critical step in the country’s economic recovery.
The Central Bank of Sri Lanka anticipates economic growth to reach between 4.5% and 5% for the full year and projects growth “well above” 3% in 2025. Governor Nandalal Weerasinghe has also pointed to a strengthening of foreign exchange reserves, providing a buffer against future debt servicing obligations.
