Macroeconomic Forecast Sri Lanka

BMI View: Low-intensity conflict between the government and Tamil Tiger rebels could hit the economy and push up inflation and interest rates while threatening the central bank's 2006 economic growth forecast of around 7.0%. Rising global oil prices continue to hurt Sri Lanka's imports - the trade deficit widened by 48% y-o-y in H106. We believe growth in 2006 will remain in the 5.5-6.0%

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