Changing political scenario affected Sri Lanka economy

Apr 28, 2016

Sri Lanka's ailing economy grew at a slower-than-expected 4.8% last year, the country's Central Bank said on Wednesday, attributing it to changing political scenario and the resultant policy uncertainties.

In the 2015 CentralBank annual report, released in Columbo, the growth in 2015 was recorded at 4.8% down from 4.9% in 2014.

"There was a slight decrease due to the two major elections held and the outflow of foreign investment due to current global slow down," Nandalal Weerasinghe, deputy governor of the Central Bank said.

He said that the public service salary increase had led to the growth in consumption levels, this in turn had an effect on the growth in the service sectors.

In 2015 the country faced two elections, the presidential election in January and the parliamentary election held seven months later.

"The changing political scenario had impacted on the investments in the industrial sector which slowed down the economy," Weerasinghe said.

The fiscal deficit increased to 7.4% in 2015 as the government failed to realize the expected revenue levels.

The 2015 annual report rates Sri Lanka's GDP to be $82.3 billion.

The government hopes to finalize its agreement with the IMF to seek support worth 1 billion to 1.25 billion dollars during the next few days, Weerasinghe added.  - 
- http://www.business-standard.com