The World Bank (WB) projects Sri Lanka’s economy to grow by 3.3 percent while expressing concerns over elevated debt distress in the country.
The WB in its latest 2021 Global Economic Prospects report estimated that Sri Lanka’s economy to have declined 6.7 percent in 2020, which is above the estimates of the Central Bank of Sri Lanka.
The Central Bank estimated that the country’s economy to have contracted by 3.9 percent in 2020.
In Sri Lanka, the pandemic-induced shock further increased an already-high risk of debt distress with its sovereign spread over a thousand basis points above pre-pandemic levels.
Further, The WB expressed concerns about the elevated debt distress in Sri Lanka.
“The risk of debt distress is elevated in several economies, especially Maldives, Pakistan, and Sri Lanka, with decisive action required to maintain macroeconomic stability,” it said.