Given the possibility of further weakening in the global economy, efforts at greater revenue mobilization particularly in countries like Sri Lanka could pay dividends by allowing governments to maintain critical social and infrastructure programs, the World Bank said.
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Governments should also look at further improving the targeting of its safety nets and capacity to respond to a crisis to improve efficiency of social safety net programs, it said.
"With markets in the United States and Europe expected to experience prolonged weakness, South Asian countries have the opportunity to re-think and pursue new sources of growth for their countries," the World Bank said.
It has also lowered its forecast for economic growth in the island, saying Sri Lanka is now expected to grow at 6.8 percent in 2012 and 7.7 percent in 2013.
Earlier this month, Sri Lanka's central bank said Sri Lanka's economy is projected to grow at 8.
0 percent in 2012 after having grown at about 8.3 percent in 2011. The foreca