Sri Lanka to grow at 8-pct in 2012, new deal with IMF: CB Governor

Jan 03, 2012 (LBO) – Sri Lanka’s economy is projected to grow at 8.0 percent in 2012 with a new deal in the offing with the International Monetary Fund, Central Bank governor Nivard Cabraal said. The island economy had grown at about 8.3 percent in 2011, he said.

In 2012 Sri Lanka is targeting an inflation rate of between 5-6 percent, Cabraal said.

Annual average inflation for 2011 was 6.7 percent compared with 6.2 percent the year before, according to a 12-month moving average.

Cabraal said the economy had earlier been forecast to grow at nine percent in 2012.

But the forecast was lowered as the global economic situation had changed with the debt crisis in Europe and recession or low growth looming in key Western markets.

Sri Lanka will also negotiate a follow up or surveillance programme with IMF for 2012, Cabraal said at the launch of the central bank’s monetary policy road map for 2012.

The International Monetary Fund has so far given Sri Lanka 1.7 billion US dollars under its stand-by arrangement programme, Cabraal said.

The IMF came in with a 2.5 billion US dollar bailout after Sri Lanka ran down its foreign reserves in a period of peg defence from arou