Sri Lanka Economic Outlook
November 17, 2020The economy should have recovered somewhat in Q3 after it likely contracted at the height of the pandemic in Q2. Industrial production declined at a much softer rate in July–August relative to Q2. Moreover, the services and manufacturing PMIs were markedly higher in Q3 than in the prior quarter, hinting at strengthening private sector activity. In addition, remittances improved significantly in the same period, boding well for private consumption. Turning to Q4, the economy is facing rising headwinds stemming from fresh restrictions imposed in October following a surge in Covid-19 cases. In other news, the government will present the 2021 budget to parliament on 17 November. According to the appropriation bill published ahead of the budget, next year should see expenditure of LKR 2.7 trillion—USD 14.5 billion or 17% of GDP—above the LKR 2.5 trillion expected spending for 2020. The biggest share will be directed at defense, highways and local government.
Sri Lanka Economic GrowthThis year, GDP is set to contract due to the fallout from Covid-19. In 2021, the economy is expected to recover as restrictions ease and foreign demand rebounds. A possible prolonged downturn in the tourism sector and significant debt repayments due to take place next year, together with tight credit access, pose downside risks to the outlook. FocusEconomics panelists project the economy to grow 3.4% in 2021, which is up 0.5 percentage points from last month’s forecast. In 2022, our panel sees the economy growing 4.7%.
Sri Lanka Economy Data
5 years of Sri Lanka economic forecasts for more than 30 economic indicators.
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Sri Lanka Facts
|Exchange Rate||181.2||0.02 %||Jan 01|
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