Sri Lanka’s Economy Rebounds in Q4 2023, Tourism Arrivals Surge

 Sri Lanka’s Economy Rebounds in Q4 2023, Tourism Arrivals Surge

Sri Lanka’s economy bounced back strongly in the fourth quarter of 2023 from its unprecedented financial crisis, with tourism arrivals increasing, the government announced Saturday. The census and statistics department reported that agriculture, industries, and services contributed to a 4.5 percent expansion in the December quarter, compared to a 12.4 percent contraction the previous year.

However, the overall economy still contracted by 2.4 percent in 2023, despite improving from a 7.8 percent contraction in 2022 when the country defaulted on its $46 billion foreign debt. The department noted a duality in Sri Lanka’s economic performance in 2023, with negative growth in the first half of the year followed by a rebound in the second half.

The resurgence in tourism occurred towards the end of the year, with the number of tourists visiting the country more than doubling to 210,000 in December compared to 91,900 the previous year. Worker remittances also saw improvement.

Sri Lanka is currently utilizing a four-year $2.9 billion bailout loan from the International Monetary Fund and is negotiating with foreign creditors for a debt restructuring plan.

In 2022, the country faced severe shortages of food, fuel, and pharmaceuticals after running out of foreign exchange to pay for imports, leading to civil unrest and the ousting of then-president Gotabaya Rajapaksa. His successor, Ranil Wickremesinghe, implemented measures to stabilize state revenue, including tax increases, subsidy withdrawals, and essential price hikes.

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