Sri Lankan Economy
- Export performances remained poor as figures for July show a drop of 4% Y-o-Y. While imports also declined by 6.6% Y-o-Y.
- Interest rates remained unchanged at 7%, while inflation hovered around the 4% mark. However, the annual averages increased 5.0% – 2.2% higher than last year. The National Consumer Price Index reduced slightly to 5.7% in September from 6.0% in August.
- Unemployment for Q2 2016 stood 4.6%, showing a slight increase from last quarter’s 4.2% – largely due to a contraction of employment of workers in the Agricultural sector.
- Latest Purchasing Manager’s Index (PMI) figures for the month of September showed strong results for the Manufacturing Sector – increasing to 57.7 points from 53.5 in August 2016. PMI for Services recorded 57.7 index point, lower from last month’s figure of 61.2 point, indicating expansion in the sector but at a much slower rate.
- The latest tourism figures for the month of September also showed strong figures, as arrivals went up 4% Y-o-Y, largely attributable to the increase in arrivals from Western Europe, United Kingdom and East Asia.
- Sri Lanka slipped by one spot to 110 in the latest Doing Business Index rankings, published by the World Bank, dragged down by lack of improvements in areas dealing with construction permits, enforcing contracts and paying taxes.
- Oil prices continued it’s steady uptick, as hopes of an output cut solidified as OPEC countries, along with Russia pledged to work together to limit oil production. However, prices may face increased pressure as US Shale oil producers have made strong comebacks.
- A dampened world demand across advanced economies hit Chinese exports sharply this September, falling by 5.6% year-on-year, adding further pressure to the Chinese Yuan.
- In its latest economic outlook, the IMF expected global growth levels to remain unchanged at 3.1%, with a minor recovery in 2017 to 3.4%. Lackluster growth expectations, according to the report, was largely due to worrying trends over advanced economies and poor growth results in Africa.
- The Sterling has dropped to its lowest level since 1985, as many fear over the government may be leaning towards a ‘Hard Brexit’ – which could restrict access to the European Union’s Single Market.