Sri Lanka’s economy would grow 1.5 percent in 2020, down from 2.3% in 2019 largely owing to the negative impact of COVID-19, according to the latest data released by the Central Bank.
“The Sri Lankan economy recorded a subdued growth of 2.3 per cent in 2019, compared to the growth of 3.3 per cent in 2018, as per the provisional estimates of GDP of the Department of Census and Statistics (DCS). All major sectors of the economy recorded positive, but at modest growth rates,” the Central Bank said in the Annual Report 2019 which was released in Colombo yesterday.
“According to GDP estimates based on the expenditure approach, growth in 2019 was driven by consumption growth and the improvement in the external balance of goods and services.”
The first copy was handed over to Prime Minister and Minister of Finance, Economic and Policy Development, Mahinda Rajapaksa by Professor W.D.Lakshman, the Governor of the Central Bank of Sri Lanka. Dr. P. Nandalal Weerasinghe, Senior Deputy Governor, and Dr. Chandranath Amarasekara, Director of Economic Research of the Central Bank were present on the occasion.
In 2020, the Central Bank projects the export revenue to be US$ 8.7 billion, down from US$ 11.9 billion in 2019 while the import bill would be US$ 15.4 billion, down from US$ 19.9 billion. The Report said, in 2019, Sri Lanka’s dismal performance continued in terms of real economic growth, although macroeconomic stabilisation measures helped correct the external sector imbalances to some extent, while inflation pressures remained muted on average. The Easter Sunday attacks had a severe impact on the tourism sector, and their adverse spillover effects were felt across the economy.
Policy measures aimed at reducing pressures on the balance of payments (BOP) and the exchange rate continued in 2019, which together with steps taken to revive the economy, contributed to notable slippages in the fiscal sector. The Bank’s Annual Report said, “Despite the temporary setback posed by the pandemic, appropriate growth supportive reforms to address longstanding structural issues and enhance domestic production, improve export orientation, attract foreign direct investment (FDI), facilitate innovation, improve factor productivity and efficiency, and improve policy buffers, if implemented without delay, would enable Sri Lanka to realise the desired outcome of achieving sustained and equitable economic growth and becoming a prosperous nation in the period ahead.”
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