According to the report, urgent policy measures are needed to address the high levels of debt and debt service, reduce the fiscal deficit, restore external stability, and mitigate the adverse impacts on the poor and vulnerable.
"The World Bank is deeply concerned about the uncertain economic outlook in Sri Lanka and the impact on people," said Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka in a pres release on Wednesday.
"We are working on providing emergency support for poor and vulnerable households to help them weather the economic crisis and we remain committed to the wellbeing of the people of Sri Lanka, and to a narrative of sustainable and inclusive growth that will require concerted and collective action," he added.
South AsiaReleased this week, the latest South Asia Economic Focus Reshaping Norms: A New Way Forward projects the region to grow by 6.6 percent in 2022 and by 6.3 percent in 2023.
The 2022 forecast has been revised downward by 1.0 percentage point compared to the January projection, mostly due to the impacts of the war in Ukraine.
Countries in South Asia are already grappling with rising commodity prices, supply bottlenecks, and vulnerabilities in financial sectors.
The war in Ukraine will amplify these challenges, further contributing to inflation and deteriorating current account balances.