Asian Development Outlook (ADO), the annual publication of the Asian Development Bank in its 2021 issue forecasts a recovery in Sri Lanka’s economy as the global as well as the domestic economy steadily regains momentum as nations enter the final stages of the battle against Co-vid 19.
Sri Lanka in recent years has experienced significant blocks to its economic growth, first of which was the Easter Sunday Terrorist Attack back in April 2019 that shocked the international community. The attack resulted in major island wide military operations and lockdowns and travellers were advised to not travel to Sri Lanka. This devastated the local tourism sector classified as the 3rd largest foreign exchange sector next to remittances and garments. But Sri Lanka was able to recover from these attacks to the extent where Lonely Planet named the island nation the number one travel destination of 2019. But unfortunately as the nation recovered from the attacks the worldwide Co-vid 19 pandemic swept across the island in 2020 further impeding the economic growth of the island.
The presence of high public debt and external financing requirements further complicated matters and the current trade restrictions placed by the government as a means of preventing the spread of the virus continue to slow down the economic recovery. But with local and global vaccination campaigns picking up pace many forecast a significant rebound in the economy.
An economic growth of 4.1% for 2021 was forecasted and reasons for such a growth was determined as the increase in private consumption supported by low interest rates and pent up demand. Low interest rates, strong global demand for products such as tea and spices and the recovery of domestic demand and higher oil prices are among those listed in the publication. Furthermore the publication also predicts an economic growth of 3.6% for the year 2022.
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