Macroeconomic Forecast Sri Lanka

December 2005 | Macroeconomic Forecasts

Growing levels of political violence, rising inflation and a large oil bill will impact Sri Lanka’s growth forecasts in 2005-06. Inflation continues to be driven by high petroleum prices. It stood at 12.5% y-o-y in October, down from 12.7% in September, and the government’s reluctance to pass on the burden to the consumer will add to its yawning fiscal deficit. We estimate GDP growth in 2006 to remain under 6%.

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