Tue Oct 07 16:33:31 UTC 2025: Okay, here’s a summary of the text, followed by a news article based on that summary:

**Summary:**

The World Bank reports that while Sri Lanka has shown strong economic growth recently, supported by an IMF bailout and rebound in industry/services, the recovery from the 2022 crisis remains incomplete. Growth is below pre-crisis levels, and poverty is still elevated. High food prices and slowing reserve accumulation are concerns. The World Bank emphasizes the need for continued macroeconomic stability, structural reforms to foster private sector-led growth (including easing trade barriers and improving the business environment), and more efficient, targeted public spending due to fiscal constraints. A large portion of government spending is tied up in salaries, welfare, and interest payments, limiting investment in key areas like infrastructure, education, and health.

**News Article:**

**Sri Lanka’s Economic Recovery ‘Uneven and Incomplete,’ Warns World Bank**

*Colombo, October 7, 2025* – Despite recent encouraging economic progress, Sri Lanka’s recovery from its 2022 economic crisis remains “uneven and incomplete,” according to a World Bank report released today. While the nation has experienced strong growth, aided by a $3 billion IMF bailout and a rebound in industry and services, key indicators remain below pre-crisis levels, and poverty remains significantly elevated.

The World Bank projects Sri Lanka’s economy to grow by 4.6% in 2025 before slowing to 3.5% in 2026. David Sislen, World Bank Division Director, emphasized that “To build a stronger, fairer economy that benefits all households…Sri Lanka needs the private sector to invest and create jobs and ensure that every rupee of public money is well-spent.”

While inflation is low and external inflows are robust, high food prices and a slowdown in reserve accumulation are causes for concern. Critically, Sri Lanka’s economic output is still below 2018 levels, and poverty remains twice as high as in 2019.

The report calls for urgent structural reforms to foster private sector-led growth. Key recommendations include easing barriers to trade and investment, improving the business environment, and modernizing tax administration, land, and labor market regulations.

The World Bank also highlighted the country’s strained fiscal situation. Over 80% of government spending is allocated to public sector salaries, welfare programs, and interest payments, leaving limited resources for crucial investments in infrastructure, education, and health.

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