ADB lowers Sri Lanka growth expectations for 2018 and 2019
ECONOMYNEXT – Sri Lanka’s annual growth rate has been lowered this year and the next in the Asian Development Bank’s latest outlook owing to weak investments and exports.
In an update to its Asian Development Outlook, the ADB said it had revised down the island’s annual economic growth rate to 3.8 percent from 4.2 percent in 2018 and 4.5 percent from 4.8 percent in 2019.
“Sri Lanka’s growth forecast is downgraded for both this year and next on weak investment and exports, and as the government implements structural reform to lift its fiscal performance,” the report said.
“By contrast, inflation moderated in Sri Lanka with easing food prices and the statistical base effect from last year’s high prices.”
The update lowered the outlook for inflation down to 4.5 percent from 5.2 percent in 2018 and 4.7 percent from 5.0 percent in 2019.
Growth projections are revised down for Sri Lanka where the first quarter witnessed tightening government consumption, stagnant fixed investment, and lower net exports, the ADB said.
Overall, the ADB said South Asia as a region is on track to meet the 7.0 percent subregional growth forecast in ADO 2018 with continued recovery in India, and to accelerate as forecast to 7.2% in 2019 with faster expansion in the rest of the region.
“Continued expansion in manufacturing and construction supports the earlier 7.6% growth forecast for these sectors this year,” the report said.
“Growth forecasts for Bangladesh, Nepal, and Pakistan are upgraded on higher domestic demand and supportive government policies, including currency devaluation and, in Pakistan, the imposition of new tariffs on imported goods.”
(COLOMBO, 27 September, 2018)