📈 Sri Lanka at 78: Economic Recovery Amidst Structural Deficit

Sri Lanka marks 78 years of independence grappling with a chronic "independence deficit," characterized by a cycle of 17 IMF bailouts and a persistent inability to maintain fiscal discipline. While neighbors like India have transformed into global hubs for software and pharmaceuticals, Sri Lanka remains vulnerable to recurring crises. • Overall Economic Performance GDP Growth: The economy grew by 4.8% in Q1 2025 and 4.9% in Q2 2025, continuing a recovery from the 9.5% contraction seen between 2021–2023. Debt Status: Debt-to-GDP stood at 96.1% in 2024, down from 120.9% in 2022. However, experts warn that any ratio above 77% leaves the nation highly vulnerable to default. Poverty: National poverty levels remain elevated at 24.5% as of 2025, compared to 13.1% in 2021. • Sector Breakdowns & Structural Challenges Agriculture: Once a backbone, the sector faced a 0.7% contraction in Q1 2025. It continues to struggle after the 2021 organic fertilizer policy failed, shifting the nation toward food imports. Human Capital & ICT/BPM: A massive brain drain is underway; 600,000 citizens migrated in 2023-24, including essential doctors, engineers, and IT professionals. The Brain Drain Index reached 7.6 in 2023, far exceeding the global average of 5.17. Fiscal Discipline: Despite the 17th IMF program, reports indicate a return to money printing in 2024, mirroring the policies that led to the 2022 rupee collapse. • Sovereignty & Debt Management Debt restructuring with 98% bondholder participation is nearly complete, yet "asset stripping" concerns persist. The Hambantota Port 99-year lease remains a symbol of compromised autonomy due to unpaid commercial debt. _Note: Statistics are based on 2024–2025 provisional data from the Central Bank and Department of Census & Statistics._