The Asian Development Outlook (ADO) 2021, published by the Asian Development Bank (ADB) forecasts that Sri Lanka’s economy is likely to rebound following the increased economic activity, both locally and globally.
The SL economy took a major hit following the Easter Attacks (2019) and lockdowns during the Coronavirus pandemic. High public debt as well as external financing requirements has placed a strain on the economy.
Despite this, Sri Lanka’s economic growth, supported by: increased private consumption, low interest rates and stronger global demand, is expected to rise to 4.1% in 2021.
Foreign Direct Investments generated by the development of the Colombo Port City and Hambantota Industrial Zone are expected to further support economic growth in the country.
While import restrictions are likely to clamp down on overall import growth, the subsequent effects of high food inflation in 2020 and good agricultural growth are expected to keep annual average inflation stable at 4.5% in 2021, before rising to 5.0% in 2022.