Thursday, 12th June 2014
COLOMBO, (Xinhua) -- Sri Lanka is expected to post the strongest economic growth in South Asia in 2014, hitting 7.2 percent, according to a Word Bank's latest report on Thursday.
According to the report, Sri Lanka's annual growth is forecast to remain broadly stable at 7.2 percent in 2014, and over time, to moderate to about 6.9 percent in 2015 and 6.7 percent in 2016, slightly higher than estimates of medium-term potential growth for the country.
However, the estimates are behind the central bank's projection of a 7.8 percent growth for 2014 and an 8 percent growth for 2015 and beyond.
Sri Lanka's annual growth pace picked up to 7.3 percent in 2013 from 6.3 percent the previous year, boosted by services, stronger manufacturing activity, robust agricultural growth and a pickup in domestic demand partly due to the easing of monetary policy.
As demand from the euro area and the United States improved in the second half of 2013, exports from Sri Lanka grew rapidly, the World Bank observed.
Despite acceleration in growth, Sri Lanka's inflation fell from 6.7 percent in October 2013 to 3.2 percent in May this year, the report noted. Sri Lanka's deficit has also fallen in recent years due to tight monetary policies.
With the exception of Nepal and the Maldives, all countries in South Asia are faced with significant revenue shortfalls, the report said.
According to the World Bank, GDP growth in South Asia in 2014 will be at 5.3 percent, and it will rise to 5.9 percent in 2015 and 6.3 percent in 2016.
The report said most of the acceleration is localized in India, supported by a gradual pickup of domestic investment and rising global demand.
India will grow at 5.3 percent in 2014 and the World Bank projected India's GDP to grow at 6.3 percent for 2015-16 and 6.6 percent for 2016-17.
While credit growth is slowing in South Asia, domestic financial risks remain as non-performing loans (NPLs) remain an ongoing concern, the World Bank report said. Sri Lanka has the second lowest NPLs as a share of total loans in South Asia.
According to the global lender, South Asian countries are vulnerable to political developments in Ukraine and Russia that could result in tighter international oil supplies, given the reliance of South Asia on imported crude oil.
Editor: Luan
From : http://news.xinhuanet.com/english/business/2014-06/12/c_133403149.htm
