Colombo: The World Bank has approved USD 700 million in financing to help Sri Lanka to recover from the current economic crisis and provide relief to the poor and vulnerable people, the biggest funding tranche since the IMF deal in March.
Cash-strapped Sri Lanka is currently struggling with the worst economic crisis in history.
In 2022, the economy had contracted by over seven per cent as the economic difficulties forced people to take to the streets with protests across the island nations that also led to the ouster of Sri Lanka’s powerful Rajapaksa family from politics.
The World Bank Board of Directors approved USD 700 million in financing to help Sri Lanka to recover from the current economic crisis and provide relief to the poor and vulnerable people, the Washington-based bank said in a press release.
Of this amount, USD 500 million have been assigned for budgetary support and USD 200 million for social security.
This is the biggest financial relief to Sri Lanka since the International Monetary Fund (IMF) reached an agreement with Sri Lanka last March to provide an Extended Fund Facility of USD 2.9 billion.
In March, the IMF approved a USD 3 billion bailout programme to help Sri Lanka overcome its economic crisis and catalyse financial support from other development partners, a move welcomed by Colombo as a “historic milestone” in the critical period.
Sri Lanka has been hit hard by a catastrophic economic and humanitarian crisis, sparked by years of mismanagement and the raging pandemic.
The World Bank said its Board of Directors approved USD 700 million in financing for two operations to help Sri Lanka implement foundational reforms that restore macroeconomic stability and sustainability, mitigate the impact of current and future shocks on the poor and vulnerable, and support an inclusive and private-sector-led recovery and growth path.
The Sri Lanka Resilience, Stability and Economic Turnaround (RESET) Development Policy Operation (USD 500 million) will support reforms that help improve economic governance, enhance growth and competitiveness, and protect the poor and vulnerable.
Dear Reader,
Every day, our team at EastMojo travels through rain, rough roads, and remote hills to bring you stories that matter – stories from your town, your people, your Northeast.
We do this because we believe in truthful, independent journalism. No big corporate backing, no government pressure – just honest reporting by local journalists who live and breathe the same air you do.
But to keep doing this work, we need you. Your small contribution helps us pay our reporters fairly, reach places others ignore, and keep asking the tough questions.
If you believe the Northeast deserves its own fearless voice, stand with us.
Support independent journalism. Be a Member.
Thank you,
Karma Paljor
Editor-in-Chief, eastmojo.com
It will provide budget support in two equal tranches against agreed prior actions, it said.
The World Bank Wednesday announced that its Board of Directors discussed the new Country Partnership Framework (CPF) for Sri Lanka, which aims to help restore economic and financial sector stability and build a strong foundation for a green, resilient, and inclusive recovery.
Also Read | PM Modi greets people on Eid ul-Adha