New Delhi

Sri Lanka's recent economic data paints a robust picture of the country's economic recovery after a crippling foreign exchange crisis.

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The economy grew 5.3 per cent in January-March quarter, a drastic improvement on the 10.7 per cent contraction in the same quarter last year. This expansions also topped Bloomberg forecast of 4 per cent.

Deputy finance minister Ranjith Siyambalapitiya expressed optimism regarding the country's growth momentum. He said 'It is remarkable that we were able to achieve positive growth after facing the worst economic crisis ever.'

Sri Lanka's industrial sector scripted a remarkable comeback, with an expansion of 11.8 per cent in the first quarter. This is in sharp contrast to the 24.3 per cent contraction in the same quarter last year. Construction sector also rebounded strongly as inflation settles from its peak of 70 per cent in September 2022.

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Sri Lanka's economic crisis began with a foreign reserves shortfall, which led to a sudden shortage of essentials like food, fuel and medicines. This fuelled a civil unrest, leading to a political upheavel of then president Gotabaya Rajapaksa.

His successor Ranil Wickremesinghe has initiated major tax reforms to generate state revenues. While energy subsidies were withdrawn and prices of essentials also raised, the country is slowly breaking away from the shackles of inflation. The International Monetary Fund released $336 million as part of a four-year $2.9 billion bailout for Sri Lanka after defaulting on the $46 billion foreign debt in April 2022.