- GDP Growth: The Sri Lankan economy grew by 4.4% during 2016, compared to 4.8% in 2015. This was 0.1% lower than the lower bound forecast by the Chamber’s EIU of 4.5%. The fourth quarter of 2016 grew at 5.3%, due in part to the base effect of low GDP growth in the same quarter of the previous year.
- Exports: Edged up by 4.7% in December 2016 (the latest month for which figures are available) to US$ 859 Million. Exports ended the full year at US$ 10.3 Billion, which was 2.2% lower than for the full year 2015.
- Imports: Double-digit growth continued for the third consecutive month, up by 10.4% to US$ 1.8 Billion in December (but at a relatively slower pace than in the previous three months). Full year 2016 posted a 2.5% larger import bill than in 2015, at US$ 19.4 Billion.
- External Account: Trade deficit widened by 16% in December compared to a year earlier, and for the full year 2016 is widened by a sharp 8.4% to US$ 9.09 Billion. Worker remittances picked up strongly in December, reversing the slowing growth seen over the previous months. Meanwhile, tourism earnings increased by 13% Y-o-Y.
- Private Sector Credit: Growth slowed in January to 20.9% from 21.9% in the previous month. The CBSL hiked interest rates at its March Monetary Policy Committee Meeting by 25 basis points, as an early response to upward inflationary pressures.
- Oil prices: Global oil futures have dipped to its lowest in 3 months, as supply increases in non-conventional fossil fuel (i.e. shale) producers like US and producers like Iraq overshadow the production cuts coordinated by OPEC.
- US: As widely expected, the Federal Reserve raised interest rates once more, amidst positive economic activity and jobs data. Meanwhile, American consumer and business sentiment have been upbeat on President Trump’s proposed tax cuts and regulatory easing. Yet, worries around trade protectionism and possible retaliation by trade partners weight on sentiment.
- EU: Eurozone economic indicators are showing positive momentum, but uncertainty due to elections in key Eurozone economies weigh on investor sentiment. The ECB’s moves in the coming months on continuing and rolling back stimulus measures will be a good indication of the region’s economic prospects.
- China: Economic data out of China indicates that the economy may be stabilizing, amidst a rebalancing of activity away from investment and towards consumer spending. Manufacturing PMI data also showed a marginally more positive trajectory than at the start of the year.