Sri Lanka to lower growth expectations to 6.8 per cent this year
View(s):The Asian Development Bank has forecasted Sri Lanka’s growth at 6.8 per cent lthis year, however down from government projections of 7.5 per cent.
The ADB attributed this to a “strong performance in the first quarter of the year,” the bank’s Outlook report released last week stated. The Central Bank early this year forecasted growth to reach 7.5 percent for 2013.
It was noted that monetary easing and the improvements on electricity generation for the domestic industry was set to accelerate growth next year to 7.2 per cent.
In this context, Sri Lanka was expected to do better than its other economies in the region namely Afghanistan, Bangladesh, Nepal and Pakistan that were likely to record “softer growth” in 2013 than last year due to changes in political leaderships hampering on economic policy making.
On the other hand, India was likely to slow down in growth terms to 5.8 per cent from previous projections of an expected 6 per cent, the report indicated.
However, pre-election spending and increased US growth could prove to help the subcontinent’s economy accelerate next year as monetary easing due to slower inflation and increased consumption was expected to kick in, the report stated.In the meantime, expectations are for a bounce back in the Asian economy but ADB indicates that on the other hand the region’s growth slowed down and would only pick up marginally from 2012’s 6.1 per cent to a forecasted 6.3 per cent this year and 6.4 per cent in 2014.
The stronger Chinese economy has been exerted pressure from a lower demand from the domestic market for imported goods and the demand for its exports were impacted due to slow activity in other countries and strengthening of the renminbi, the report highlighted.
This same weak demand from major industrial economies continued to hamper growth patterns in most of East Asia, particularly Hong Kong, China, Mongolia and Taipei, China, the report stated.
In Southeast Asia Philippines and Indonesia were projected to perform better as they look strong backed by investments and domestic consumer spending. But Malaysia was said to have slowed down
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