Nov 05, 2019 (LBO) – The Sri Lankan economy is projected to grow by around 3.5 percent in real terms in 2020, a new Central Bank report says.
“The growth is expected to be broad-based and positively contributed by all major economic activities,” it says.
“Further, investor confidence, which was adversely affected by domestic uncertainties, is expected to improve, boosting private investments.”
The expected surge in government spending ahead of national elections together with the pick up of private spending in line with the normalisation of consumer behaviour would strengthen the domestic demand during the year, the Bank adds.
The economy would also continuously benefit from the preferential trade agreements with major trading partner economies and the easing of global oil prices.
Further, the Bank says diversification of the export portfolio and improvement of the tradable sector would help sustain improvement in the external sector of the economy.
The new report also says that agriculture sector is envisaged to rebound in 2020.
Surplus production of the 2018/19 Maha and 2019 Yala season resulted in the availability of sufficient rice to meet household demand until January 2020 according to the Department of Agriculture.
Industry-related economic activities are also expected to continue the positive momentum in 2020, assuming that investor confidence improves.
“Growth in manufacturing and construction activities are expected to drive the industry growth benefitting from GSP+ concessions as well as the realisation of government construction projects as planned, providing an impetus for private construction activities,” the report says.
“Construction activities are expected to grow at a higher rate with the acceleration of government-initiated development projects such as the continuation of the Central Expressway and the first phase of the Light Rail Transit System.”
As for Services related activities the growth is expected to be broadbased and widely supported by economic activities such as wholesale and retail trade, financial services, insurance, telecommunication, transportation and professional services as well as government sector driven services such as public administration and defence, education and health related service activities.