Sri Lanka's Economic Recovery Faces Tariff Turbulence

The Trump administration's tariffs pose challenges to Sri Lanka's economic recovery, says the IMF. Despite impressive growth and fiscal reforms, the US tariffs have created uncertainty. Sri Lanka exported $3 billion in apparel to the US. President Anura Kumara Dissanayake addressed the tariffs' impact in a letter to Donald Trump.

Sri Lanka's path to economic recovery has hit a roadblock due to tariffs imposed by the Trump administration, according to the International Monetary Fund (IMF). The tariffs have introduced uncertainty as the nation strives to overcome its financial crisis.

The IMF team visited Sri Lanka to evaluate the performance and policies tied to the four-year, $2.9 billion financial package granted in 2023. Despite a promising 5% growth forecast for 2024 and a significant decline in inflation, the IMF cautions that the recent trade disruptions require more evaluation.

Sri Lanka faces a 44% tariff as part of the US's strategy to address trade imbalances. President Anura Kumara Dissanayake recently addressed the impact of these tariffs in a letter to President Donald Trump, stressing the challenges posed to Sri Lanka's economy.

(With inputs from agencies.)