The World Bank’s latest Global Economic Prospects report issued on June 10, says Sri Lanka will have the strongest economic growth in South Asia in 2014 reaching 7.2 percent.
According to the report, in Sri Lanka, where output is currently above potential, annual growth is forecast to remain broadly stable at 7.2 percent in 2014, and over time, to moderate to about 6.9 percent in 2015 and 6.7 percent in 2016, slightly higher than estimates of medium-term potential growth for the country.
Sri Lanka’s annual growth picked up to a 7.3 percent pace in 2013 from 6.3 percent the previous year, led by services, stronger manufacturing activity, robust agricultural growth and a pickup in domestic demand partly reflecting easing of monetary policy.
As demand from the Euro Area and U.S improved in the second half of 2013, exports in Sri Lanka grew rapidly.
The report said that despite acceleration in growth, Sri Lanka’s inflation fell from 6.7 percent in October 2013 to 3.2 percent in May. Sri Lanka’s deficit has also fallen in recent years due to tight monetary policies.
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