Macroeconomic Forecast Sri Lanka

BMI View: Growth in Sri Lanka's US$23bn economy depends largely on whether the government and Tamil Tiger rebels can avert a return to full-blown civil war. Institutional investors are keeping out of the local stock market as uncertainty grows, while many companies from the textile to power sectors are holding back investments. Rising global prices will continue to hurt inflation and imports. BMI expects that growth in 2006 will remain below 6.0%.

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