Sri Lanka’s output is estimated to have fallen by 9.2 percent in 2022 as the government ran out of the foreign exchange needed to cover food and fuel imports while the rupee plummeted and imports contracted sharply, and to service external debt, the World Bank says.

In its Global Economics Prospects in January 2023, the global financial institution raised concerns about the continuing shortages of food, energy and medical supplies facing Sri Lanka nation while the authorities are implementing a stabilization program.

Stating that the crisis and its repercussions have increased poverty and reversed much of the country’s income gains over the past decade, the World Bank went on to note that tourist arrivals, an important source of foreign exchange, continue to be depressed with international arrivals last October about one-third of their 2019 level.

The World Bank expects Sri Lanka’s output to contract again this year by 4.2 percent. The forecast for 2023 growth has been revised down owing to the ongoing foreign currency shortages, the effects of higher inflation and policy measures designed to restore macroeconomic stability.

The global financial institution, in its outlook for the South Asia, mentioned that the region continues to be adversely affected by spillovers from the Russia’s invasion of Ukraine, rising global rates and weakening growth in key trading partners.