ADB Approves $200 Million To Help Sri Lanka Tackle Middle East Economic Impact

COLOMBO (News 1st) - The Asian Development Bank (ADB) has approved a $200 million policy-based loan to help Sri Lanka cushion the economic impact of the ongoing conflict in the Middle East while supporting long-term economic reforms.

According to the ADB, the financing is part of a broader $450 million regional support package for Sri Lanka and Cambodia aimed at helping vulnerable economies withstand rising global uncertainty triggered by the Middle East crisis.

The Sri Lanka package includes $100 million in additional financing specifically to help the country absorb economic pressures resulting from the conflict.

The funding will support the government's Trade, Investment, and Industry Development Program, which focuses on modernising trade systems, improving the competitiveness of small and medium-sized enterprises (SMEs), and attracting investment into economic zones.

ADB said the reforms are expected to help businesses expand exports, integrate into regional and global value chains, create jobs, and promote private sector-led economic growth.

The bank noted that strengthening trade and diversifying exports will enhance Sri Lanka's resilience against future external economic shocks.

Commenting on the assistance, ADB President Masato Kanda said the bank is acting swiftly to help countries affected by the spillover effects of the Middle East conflict, while supporting reforms that will strengthen their economies over the long term.