The United Nation Economic and Social Commission for Asia and the Pacific (UNESCAP) in its latest report has forecast Sri Lanka’s economy to grow by 6.5 percent this year, marginally up from 6.2 percent in 2012 but lower than the Central Bank estimate of 7.5 percent.
The UNESCAP Annual Report also stated that in 2013 Sri Lanka’s GDP growth is expected to improve due to the easing of both monetary and fiscal policies and improved performance in all major sectors, mainly the agricultural sector which had suffered a setback in 2012 due to adverse weather conditions.
Analyzing the growth trends in 2012, the report stated that a strong growth momentum continued in the first quarter of the year but moderated from the second quarter onwards in response to policy tightening and weakening global demand.
“Growth projections by the UNESCAP, IMF and ADB indicate that Sri Lanka needs more time to stabilize the economy and address structural imbalances before steering the economy on a sustainable growth path,” Institute of Policy Studies Executive Director Dr. Saman Kelegama told media while presenting an analysis of the report on Friday.
Despite lower than expected growth numbers, Kelegama insisted that Sri Lanka was faring better than most South Asian countries. With the exception of Bhutan, all South Asian countries will grow at less than 6.5 percent in 2013.
Since the end of a three decade war in 2009, Sri Lanka’s growth accelerated, hitting 8 percent growth in 2010 and 8.3 percent growth in 2011. However in 2012 growth slumped to 6.4 percent amid declining exports and growing trade deficit.