Economy / Sri Lanka
Macroeconomic Forecast Sri Lanka
May 2005 | Macroeconomic Forecasts> Sri Lanka's tsunami-hit economy will slow in 2005. According to BMI forecasts, real GDP will expand by 4.5% compared with last year's growth of 5.4%. Aside from the capital loss caused by the Boxing Day sea-surge, which has been estimated at US$1bn, representing 4.9% of nominal GDP, higher interest rates will weigh down on domestic demand. On May 13, the Central Bank of Sri Lanka raised its reverse repo rate to 9.25%. The rate hike, the first for six months, was aimed at reining in consumer-price inflation, now running at three-year highs of almost 12%.
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