Skip to content
Economics

Sri Lanka Sinks Deeper Into Recession as IMF Bailout Hangs

  • Gross domestic product fell 12.4% in the three months to Dec
  • $2.9 billion IMF loan approval next week may steady finances
The bankrupt island nation grappled with soaring costs, depleted funds and severe supply shortages for much of last year as it pursued a loan program with the IMF after a debt default in May. 

The bankrupt island nation grappled with soaring costs, depleted funds and severe supply shortages for much of last year as it pursued a loan program with the IMF after a debt default in May. 

Photographer: Thilina Kaluthotage/Bloomberg
Updated on

Sri Lanka fell into a deeper recession last quarter as borrowing costs at a two-decade high to rein in inflation took their toll on the $89 billion economy.

Gross domestic product fell 12.4% in the three months to December from a year ago, according to data released by the statistics department Wednesday. That’s the biggest drop in two years and compares with a median estimate for a 13.4% decline. GDP slumped 11.8% in July-October.