Sri Lanka’s GDP growth to reach 5-pct in 2018: ADB

Asian Development Bank

Oct 09, 2017 (LBO) – Sri Lanka’s Gross Domestic Product (GDP) would be 4.5 percent at end 2017 and increase to 5 percent by end 2018, the Asian Development Bank said in its latest Asian outlook for 2017 (update).

The updated report says that the developing Asia is forecast to expand by 5.9 percent in 2017 and 5.8 percent in 2018.

The outlook for developing Asia supports optimism. Rather than the slight growth moderation forecast in Asian Development Outlook 2017 in April, this update envisages a slight uptick this year.

Growth in the region is set to pick up from 5.8 percent in 2016 to 5.9 percent this year and 5.8 percent in 2018.

Excluding the high-income newly industrialized economies, the region is expected to expand by 6.4 percent in 2017 and 6.3 percent in 2018.

“Risks to developing Asia’s outlook have become more balanced since April,” says Takehiko Nakao, president Asian Development Bank.

Asia’s infrastructure needs amounts to 1.7 trillion dollars per year until 2030 to maintain its growth momentum, reduce poverty, and respond to climate change.

“However, even factoring in funds saved through public finance reform or received from multilateral agencies, a significant financing gap remains. The public–private partnership (PPP) can help to fill the infrastructure gap,”
the report adds.

“The success of the approach depends on governments identifying projects suitable for it, engaging qualified private partners, and instituting the right process. The Asian Development Bank is a front runner in supporting the development of PPP in the region.”

According to this report Sri Lanka’s GDP grew by 3.8 percent in the first quarter of 2017 and 4 percent in the second to hold growth in the first half of 2017 to 3.9 percent year on year, unchanged from the 2016 outcome.

The industry grew by 6.3 percent in the first quarter and 5.2 percent in the second to bring first-half expansion to 5.8 percent.

Garment production strengthened slightly in the second quarter but was offset by a marked slowing in construction, to 9.3 percent from 16.1 percent in the first quarter.

Services expanded by 3.5 percent in the first quarter and 4.5 percent in the second for 4 percent growth in the first half.

An increase in financial services including insurance and in government services offset slippage in wholesale and retail trade and in hospitality.

Faster growth in the large service sector in the second quarter provided lift for 4 percent GDP growth in the period despite slackening agriculture and industry.

Exports grew by 5.2 percent year on year in the first half of 2017, rebounding from a 5.8 percent fall in 2016 as better global prices spurred agricultural exports.