Sri Lankan Economy
- Sri Lanka’s trade deficit registered a contraction of 2.2% on a cumulative basis during the first three months of 2016.
- Earnings from tourism are estimated to have increased by 20% in the four months of the year while worker remittances recorded an increase of 8.1% during the first quarter of 2016.
- Credit extend to the private sector by commercial banks continued its sharp growth and recorded a Y-o-Y growth of 27.7% in March 2016 compared to 26.5% in the previous month.
- CCPI core inflation remained unchanged at 4.5% in April 2016.
- The recent increase in the VAT rate and the removal of certain exemptions applicable on VAT and the NBT are expected to have a one-off impact on inflation, while supply side disruptions due to prevailing adverse weather conditions could exert some upward pressure on inflation in the immediate future.
- The Monetary Board of the Central Bank of Sri Lanka decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) unchanged at 6.50% and 8.00% respectively at the Monetary Board meeting held on 20 May 2016.
- The rain havoc during May 2016, affected badly on many economic sectors and the estimated reconstruction cost could be between USD 1.5-2.0 billion which is nearly 3% of the country’s entire GDP.
- Sri Lanka reached an agreement with the IMF for USD 1.5 billion loans to help lower its borrowing costs and bolster finances.
- The 42nd G-7 summit will be held on 26-27th May 2016 under the presidency of Japan and the summit will discuss measures to address the global economic slowdown, terrorism, the humanitarian crisis and ongoing conflicts.
- The supply outage and growing demand from China is expected to results a much better balance in crude oil prices in next few months.
- IMF forecasts a growth of 5.3% for Asia-Pacific Region in 2016-17.(Regional Economic Outlook-April 2016)