Sri Lanka annual GDP growth projected to be around 4.5% – 5 % in 2024
Sri Lanka’s Annual GDP growth is projected to be around 4.5% – 5 % in 2024 said Governor Central Bank, Dr. Nandalal Weerasinghe yesterday at their last monetary policy review event at CBSL yesterday.
This is due to a continued improvement in domestic economic activity which was observed during the year and reflected by leading indicators. Improvements in earnings from tourism and workers’ remittances have contributed positively to the external current account. Commenting on the inflation he said that it is expected to increase and stay around 5% from mid next year. Market interest rates, which declined over time in response to the accommodative monetary policy stance, have largely stabilised.
Supported by reduced market lending interest rates, credit extended to the private sector by Licensed Commercial Banks (LCBs) continued to expand notably since May 2024. Sectoral data for Q3-2024 on credit to the private sector also display broad-based growth across all major economic sectors. Market interest rates, which declined over time in response to the accommodative monetary policy stance, have largely stabilised. Supported by reduced market lending interest rates, credit extended to the private sector by Licensed Commercial Banks (LCBs) continued to expand notably since May 2024.
A larger expansion in import expenditure relative to export earnings drove the merchandise trade deficit to widen in the nine months ending September 2024 compared to the same period in 2023. However, improvements in earnings from tourism and workers’ remittances during this period, contributed positively to the external current account.
Asked to comment on the re- execution of the Parate law he said it was up to the government to decide on it. “But it should be done without jeopardizing the banking industry. I also think it’s fair enough if an individual/ company took a credit from a bank to repay it so that there won’t have any negative impact for the sector.”
The Governor also said that Sri Lankan authorities reached a staff-level agreement on the third review of the Extended Fund Facility with the International Monetary Fund (IMF-EFF). The continuation of the IMF-EFF programme, the expected finalisation of the debt restructuring process and continued financial support from multilateral and bilateral development partners will further enhance external sector resilience and investor confidence, amidst the country’s attempts to enhance non-debt creating inflows.
Asked by Daily News Business as to why Sri Lanka’s still cannot use a system when travelling in India similar to UPI where Indians could trade in Indian rupees in Sri Lanka he said that this process is still pending.
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