Sri Lanka’s economic growth is projected to grow by 3.6% this year and 3.8% next year from the 3.2% growth last year.
Asia Development Bank’s Resident Mission Economist Utsav Kumar said while regional countries such as India and Bangladesh are expected to perform much better than Sri Lanka in terms of economic growth, the country will have a slower growth rate due to adverse weather and fiscal consolidation efforts tied up with the IMF funding program.
He said, “While the economy is projected to recover over the next two years, for Sri Lanka to sustain and accelerate growth, fiscal and structural reforms remain essential. Though the impact of Brexit on the overall Sri Lankan economy is estimated to be marginal, a downside risk to the garment sector emanates from a no-deal Brexit scenario involving a possible tariff escalation between Sri Lanka and the United Kingdom.”
Utsav Kumar added, the large repayments on account of external debt servicing and political uncertainties may affect market sentiment and exert pressure on the Sri Lankan rupee.
He added, Sri Lanka needs to focus on areas prone to disasters and to move forward a more disaster resilient economy by preventing and mitigating consequences of weather related hazards.
Economist Utsav Kumar said, efforts also needed to be made towards mobilising funds for risk reduction and adaptation, establishing the right policy framework and building institutional capacity.
(Source: News Radio)