Sri Lanka appears to be emerging from a challenging economic period. Data indicators point towards a significant decline in inflation and a rise in foreign exchange reserves, suggesting a gradual path towards stability. The Asian Development Bank (ADB) acknowledges this positive momentum and has pledged its continued support through a new Country Partnership Strategy (CPS) for 2024-2028.
This strategic partnership aims to solidify Sri Lanka’s economic recovery by focusing on three key pillars: macroeconomic stability, sustainable growth, and long-term resilience. The ADB recognizes the need to address the root causes of the crisis and plans to achieve this through targeted interventions.
Restoring Stability and Promoting Growth
The CPS will prioritize strengthening public financial management and governance. Reforming the system, mobilizing domestic resources, and ensuring fiscal sustainability are crucial aspects of this initiative. Additionally, improving the performance of state-owned enterprises will contribute to a healthier economic climate.
Empowering the Private Sector and Green Growth
The strategy acknowledges the critical role of the private sector in Sri Lanka’s long-term economic trajectory. The ADB plans to support structural reforms that encourage greater private sector participation and diversification, with a particular emphasis on green and sustainable growth initiatives. Continued support for financial inclusion, especially for women-led small and medium-sized enterprises (SMEs), will be crucial alongside measures to promote trade and investment.
Building Resilience and Social Development
The CPS underscores the importance of improving access to essential public services. Strengthening social protection programs, investing in human capital development, and fostering agricultural modernization are all part of the strategy to build long-term resilience and ensure inclusive growth.
The ADB’s existing commitment to Sri Lanka is evident in the over $3.7 billion in public sector loans and grants provided to date. This, coupled with the $25.6 million in private sector investments, reflects a strong foundation for continued partnership.
Sri Lanka’s journey towards recovery is underway, and the ADB’s new CPS serves as a roadmap for achieving sustainable economic growth and a brighter future for the nation.