Sri Lanka’s growth is forecast to rise to 6.8 percent in 2013 as external demand continues to improve gradually and agricultural production growth returns to normal rates, the World Bank said yesterday (15).
"Growth is expected to increase further to 7.2 percent by 2015, as the earlier boom in investment and reconstruction following stabilization after conflict tapers off, implying a more sustainable pace of growth in line with underlying macroeconomic fundamentals," the bank said in its latest report, Global Economic Prospects 2013.
"Electricity cuts resulting from the effect of drought on hydropower generation capacity also adversely affected economic activity. Although policy reforms in Sri Lanka acted as a drag on growth in 2012, they are also likely to boost growth turns during the forecast horizon. A pick up of tourism during the forecast horizon will also contribute to economic activity in the island," the World Bank said.
Central Bank Governor Ajith Nivard Cabraal commended the government’s efforts to contain the fiscal deficit but said the Central Bank would keep a close watch on fiscal developments because macroeconomic stability depended on lower fiscal deficits.