Sri Lanka faces a severe economic crisis, causing a sharp rise in poverty. The country’s poverty rate has doubled since 2019, reaching 25% in 2023. Five million Sri Lankans now live below the poverty line.

Middle-income poverty now affects over 25% of the population. More than 17% face food insecurity, needing humanitarian aid. Malnutrition rates among children under five have hit 31%.

Unemployment rates are high, reaching 9.6% overall and 20% for youth. Northern and eastern regions face even higher rates, around 10-12%. Food inflation peaked at over 90% in 2022, worsening the situation.

The government is working towards economic recovery. They’ve implemented the IMF Extended Fund Facility program, providing $336 million. The new Central Bank Act aims to ensure independence and prevent money printing.

Recovery remains challenging. The IMF forecasts slow growth: 2% in 2024 and 2.7% in 2025. To reduce poverty, Sri Lanka needs growth rates over 6%.

Political risks loom with upcoming elections. These uncertainties could impact Sri Lanka’s economic policies. The road to recovery is long and complex.

Key Takeaways

• Sri Lanka’s poverty rate has risen to 25% amid the economic crisis, with five million people living below the poverty line.
• Food insecurity affects over 17% of the population, and 31% of children under five suffer from malnutrition.
• Unemployment rates remain high, particularly among the youth and in the northern and eastern regions.
• The government is implementing measures to stabilize the economy, including the IMF Extended Fund Facility program and the Central Bank Act.
• Economic recovery faces challenges, with the IMF forecasting tepid growth rates and political uncertainties looming.

World Bank Supports Sri Lanka’s Development Goals

The World Bank aids Sri Lanka’s development in education, health, and social protection. These efforts aim to boost economic growth and reduce poverty. Sri Lanka’s poverty rate hit 25% during recent economic troubles.

Education Sector Interventions and Key Results

The World Bank develops human capital across all education levels. The Early Childhood Development Project has helped 1.5 million children. The General Education Modernization project has improved learning for 1.3 million students.

These programs equip Sri Lanka’s youth with vital skills. They are crucial for driving future economic growth and development.

Health Sector Interventions and Key Results

The World Bank strengthens primary healthcare and COVID-19 response in Sri Lanka. It provided $21.6 million for essential medicines and supplies. This ensures access to critical healthcare during challenging times.

Investing in citizens’ health remains a top priority. It’s crucial as Sri Lanka recovers from its economic crisis.

Social Protection Reforms and Emergency Response

The World Bank is reforming Sri Lanka’s social safety net. A $75 million project aims to create a more effective social protection system. A $145 million emergency package supports the most vulnerable households.

These efforts help mitigate rising poverty levels. They ensure no one is left behind as Sri Lanka rebuilds its economy.

The recent strengthening of the Sri Lankan Rupee is a positive sign. The record-breaking paddy harvest in the 2024 Yala season shows the country’s resilience. These developments highlight Sri Lanka’s potential for recovery.

Sri Lanka’s Poverty Rate Rises to 25% Amid Economic Turmoil

Sri Lanka’s economic crisis has hit its population hard. The poverty rate jumped to 25% in 2022, up from 11% in 2019. The World Bank expects poverty to stay above 20% for the next few years.

Food insecurity has become widespread. Over 17% of people need humanitarian aid in 2023. Alarmingly, 31% of children under five are malnourished.

Economic Crisis Leads to Spike in Poverty Levels

Misgovernance and lack of accountability have fueled Sri Lanka’s economic woes. The reversal of the organic farming policy added to the country’s challenges. The IMF provided a loan in March 2023, opening doors for more funding.

The IMF program aims to boost government revenues and fight corruption. It also focuses on improving social welfare for the citizens.

Inflation and Food Insecurity Exacerbate Poverty

Inflation has worsened poverty in Sri Lanka. The Central Bank wants to keep inflation below 5% in 2024. However, it may rise as demand increases.

Sri Lanka has made progress in poultry production. The article “Sri Lanka Achieves Self-Sufficiency in Poultry” highlights this achievement. Yet, ensuring food security for all remains a challenge.

Government Policies and Debt Restructuring Efforts

President Ranil Wickremesinghe’s government faces criticism for its crisis management. It has used repressive laws to silence critics. The administration is also accused of failing to address corruption.

Despite challenges, the government is working on debt restructuring. It’s implementing policies to boost exports and attract foreign investment. The focus is also on tackling poverty and financial sector vulnerabilities.

The World Bank projects Sri Lanka’s economy to grow by 3.5% in 2025. However, crucial reforms are needed for sustainable growth and poverty reduction.