WB forecasts 3.3% growth for Sri Lanka this year

The World Bank has predicted Sri Lanka’s economy to grow by 3.3%  in 2020. “The acceleration afterwards will be supported by recovering investment and exports, as long as the security challenges and political uncertainty of 2019 dissipate,” the bank said in its latest January 2020 Global Economic Prospects report and noted that the “Growth is seen to stabilize around 3.7% over the rest of the forecast horizon, in line with potential growth.” In its latest edition of the South Asia Economic Focus, the World Bank said, Growth in South Asia is estimated to have decelerated to 4.9 percent in 2019, reflecting a sharper-than-expected and broad-based weakening in domestic demand. In India, activity was constrained by insufficient credit availability, as well as by subdued private consumption. Regional growth is expected to pick up gradually, to 6 percent in 2022, on the assumption of a modest rebound in domestic demand. The World Bank said global economic growth is forecast to edge up to 2.5% in 2020 as investment and trade gradually recover from last year’s significant weakness but downward risks persist. Growth among advanced economies as a group is anticipated to slip to 1.4% in 2020 in part due to continued softness in manufacturing. Growth in emerging market and developing economies is expected to accelerate this year to 4.1%. This rebound is not broad-based; instead, it assumes improved performance of a small group of large economies, some of which are emerging from a period of substantial weakness. About a third of emerging market and developing economies are projected to decelerate this year due to weaker-than-expected exports and investment. “With growth in emerging and developing economies likely to remain slow, policymakers should seize the opportunity to undertake structural reforms that boost broad-based growth, which is essential to poverty reduction,” said World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu. “Steps to improve the business climate, the rule of law, debt management, and productivity can help achieve sustained growth.”  

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