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Crisis-hit Sri Lankan economy shows strong recovery as tourists return

2 months ago 54

NEW DELHI: Sri Lanka's economy showed a strong


in the last quarter of 2023 after facing a severe

financial crisis

, with a notable increase in

tourism arrivals

, according to the government.

census and statistics department

reported a 4.5 percent expansion in the December quarter, a significant improvement from the 12.4 percent contraction the previous year.

Despite this positive development, the department added, overall economy contracted by 2.4% in 2023, compared to a 7.8% decline in 2022 when the country defaulted on its $46 billion foreign debt.
"Sri Lanka's economy experienced some kind of duality in 2023," the department said in a statement, noting that the economy contracted in the first half of the year before rebounding in the second half.

"The long-awaited boom in tourism came towards the end of the year," the department stated, adding that worker remittances had also improved.
December saw a substantial rise in tourists to 2,10,000 in Sri Lanka, more than double the previous year's numbers.
Sri Lanka is currently managing a $2.9 billion bailout loan from the IMF and negotiating debt restructuring with foreign creditors.
The country faced severe shortages in 2022, leading to civil unrest and the removal of the then-president Gotabaya Rajapaksa. The current administration has implemented measures to stabilize state revenue, including tax increases and subsidy withdrawals.
To boost state revenue, his successor, Ranil Wickremesinghe, has doubled taxes, eliminated significant energy subsidies, and boosted vital commodity prices.
(With inputs from agencies)

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