Sri Lanka’s 2024 GDP growth hits 7-year high of 5-pct amid deflation
Wednesday January 8, 2025 1:00 pm
ECONOMYNEXT – Sri Lanka’s economy is estimated to have expanded by 5 percent last year and recorded the highest growth since 2017, the Central Bank Governor Nandalal Weerasinghe said.
Announcing the policy agenda for 2025 and beyond he said leading economic indicators of industry and service sectors reflect a continuation of the expansion in output in the last quarter of 2024 as well.
“Accordingly, real GDP is projected to have grown by around 5 percent in 2024, registering the highest annual growth since 2017,” Weerasinghe told the policy launching event in Colombo.
“This higher than-expected growth also provides evidence that deflation in recent months was not due to demand factors but mainly due to supply-side factors, including administrative price adjustments.”
The island nation’s economy has been recovering from its worst crisis in 2022.
In April that year, the island nation declared an unprecedented sovereign debt default which later led to a political crisis and change in the government. The country witnessed a contraction of 7.3 percent in 2022.
The growth in 2024 also comes after contractions for five straight years, the central bank data showed.
Sri Lanka’s central bank has been operating deflationary policy since 2022, selling down its Treasury bill stock and also appreciating its currency allowing so-called ‘administered prices’ in energy to be brought down as imported coal and oil prices fell.
(Colombo/January 08/2024)