World Bank approves $700 million for crisis-hit Sri Lanka

Sri Lanka’s poverty rate is estimated to have doubled from 13.1 to 25% between 2021 and 2022.

The World Bank has approved $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 Wednesday approved $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, $500 million have been assigned for budgetary support and $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 $2.9 billion.

In March, the IMF approved a $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.