Exports, tourism to decline, reforms vital says ADB

The Asian Development Bank (ADB) on Friday said Sri Lanka is heading towards a decline in revenues as exports and tourism will be adversely impacted and government needs to take on reforms.

With March inflation at 2.2 per cent based on current events. the bank's Senior Economist Lilia Aleksanyan told media in Colombo releasing the ADB Outlook Report that going forward it will continue to be high.

Inflation is expected to "pick up in the next couple of months," it was noted as a result of the oil price hikes that will have a ripple effect within Sri Lanka.

Tourism is expected to drop further from the March dip of 20 per cent and the projection for winter is likely to be uncertain as everything depends on the opening of the West Asian airspace.

The outlook for Sri Lanka is a sense of uncertainty with growth expected to slow down to 4 per cent this year. In future with the war continuing the remittances are likely to dip and slow investments and exports.

Meanwhile the next biggest hit will be the fertiliser issue following the second Yala harvesting season that is moving in a prolonged drought as El Nino effect could impact production contributing to higher food prices.

Further it was pointed out that delays in structural reforms is not something that the country can afford at this stage.

The rupee is also expected to depreciate further within single digit levels going forward, it was noted.