Sri Lanka’s Central Bank declared the country’s economy grew by 1.6% in the quarter ending September, marking the first expansion since a currency crisis led to a debt default last year.

This growth, an improvement from a 11.5% contraction a year ago, was propelled by betterment in transport, services, and agriculture sectors, as per the bank’s statement.

However, despite this positive upturn, data from the initial nine months of the year indicated an overall contraction of 4.9%.

The International Monetary Fund (IMF) predicts Sri Lanka’s GDP for the full year 2023 to decline by 3.6%. While the IMF released $337 million in the second tranche of a $2.9 billion bailout package, it mentioned the country exhibited signs of stabilization but remained in a precarious economic state.

Sri Lanka faced nine consecutive quarters of economic decline starting from the third quarter of 2021. Last year’s crisis saw the nation default on a $46 billion external debt due to a shortage of foreign exchange needed for essential imports like food, fuel, and medicine.