Fitch Ratings cuts Sri Lanka’s economic growth target

The tsunami disaster, which left more than 30,000 people dead, will cut Sri Lanka’s economic growth by one percent this year, though the impact over the medium term will not be significant, says Fitch Ratings Lanka. The tsunami disaster, which left more than 30,000 people dead, will cut Sri Lanka’s economic growth by one percent this year, though the impact over the medium term will not be significant, says Fitch Ratings Lanka. However, the repercussions will be “somewhat muted” as damaged areas accounted for less than one – fifth of the country’s economy, Fitch said.

“At this stage, it would not be unreasonable to assume a negative impact on 2005 GDP growth of around one percentage point,” says Fitch. “However, these losses are likely to be offset to a considerable extent by higher investment growth as reconstruction of the physical capital stock in the affected areas commences.”

Sri Lanka does not have a sovereign rating at present.

Sri Lanka’s US$ 17 bn economy is expected to grow by 5.0 to 5.5 percent this year, though the reconstruction bill is estimated to cost the country about US$ 1.5 bn.

Central Bank’s Governor Sunil Mendis said Wed., that the government will look towards foreign donors