Standard Chartered Bank’s Global Research team painted a cautiously optimistic picture of Sri Lanka’s economic future during their 2024 H1 Global Research Briefing held in Colombo. Following the IMF deal, the team noted a significant economic recovery in 2023, a trend expected to continue in 2024 with a focus on commercial debt restructuring. However, they cautioned that potential election-related uncertainties could pose challenges in the year ahead.
On the global front, the Standard Chartered research team highlighted a complex economic landscape in 2024. Elevated interest rates, subdued global trade, and geopolitical tensions are expected to create persistent growth challenges. A shift in central bank policies from monetary tightening to a more neutral stance is anticipated, offering some relief for emerging markets. However, a new factor – election risk – may emerge as a significant concern for economies around the world.
Despite these uncertainties, Standard Chartered Sri Lanka’s CEO, Bingumal Thewarathanthri, reaffirmed the bank’s commitment to supporting Sri Lanka’s economic journey. Collaborative efforts and debt restructuring, he emphasized, will be crucial for achieving positive outcomes. Standard Chartered remains optimistic about Sri Lanka’s long-term prospects, hopeful of achieving sustainable growth and prosperity.
Central Bank Governor Dr. Nandalal Weerasinghe echoed this sentiment, elaborating on the country’s projected turnaround and positive growth momentum in 2024. He emphasized the importance of fiscal and policy reforms in mitigating domestic and external risks while building up Sri Lanka’s foreign reserves. Dr. Weerasinghe also expressed the Central Bank’s aim to maintain inflation at around 5% in the medium to long term, fostering a more stable environment for economic growth.
In conclusion, Sri Lanka appears to be on the path to economic recovery, bolstered by the IMF deal and ongoing reform efforts. However, navigating potential election-related challenges and a complex global environment will require continued focus on debt restructuring, policy reforms, and building resilience. Standard Chartered Bank, along with the Central Bank, remains confident in Sri Lanka’s ability to achieve sustainable economic growth and prosperity in the years to come.