Content type

Sri Lanka: Loosening Cycle Will Continue

Country Risk / Sri Lanka / Wed 24 Jan, 2024

Key View

  • While Sri Lankan policymakers left their Standing Deposit Facility Rate on hold at 9.00% at their first meeting of the year, we think that they will restart their loosening cycle in Q2 2024.
  • We expect that they will cut the rate to 7.00% by the end of the year. 
  • Risks are weighted towards the rate remaining higher for longer. In
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Sri Lanka’s Recovery Will Gain Pace In 2024

Country Risk / Sri Lanka / Tue 16 Jan, 2024

Key View

  • Sri Lanka’s economy returned to growth in Q323, and we think that output will rise by 3.5% in real terms in 2024.
  • The recovery will be driven by rising household spending, a recovering tourism sector, and increasing investment spending.
  • While we think that growth will accelerate in 2024 and 2025, output per person will not
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Sri Lankan Economy Getting Back On Track

Country Risk / Sri Lanka / Fri 22 Sep, 2023

Key View

  • We now expect the economy to shrink by around 3.0% in 2023 compared with a 1.0% contraction previously, but we still see it expanding by slightly more than 3.0% next year.
  • Survey and tourist arrival data suggest that the economy remains on the mend, but at a slower pace than we previously expected.
  • Tighter labour market
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Sri Lanka's Monetary Tightening Cycle Approaching Its End

Country Risk / Sri Lanka / Thu 06 Oct, 2022

Key View

  • We at Fitch Solutions now forecast the SDFR and the SLFR to end 2022 at 15.50% and 16.50% respectively, while expecting no further rate hikes in 2023.
  • Our forecast revision comes on the back of the CBSL's decision to maintain the SDFR and SLFR at 14.50% and 15.50% respectively at its latest meeting on October 6 2022.
  • Looking
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Sri Lanka's Interim Budget Overly Optimistic

Country Risk / Sri Lanka / Thu 01 Sep, 2022

The Latest: On 30 August 2022, Sri Lanka’s President Ranil Wickremesinghe presented an interim budget to parliament in what we believe is a bid to accelerate a deal with the IMF. According to the budget document, the authorities are aiming to narrow the country’s fiscal deficit from 11.6% of GDP in 2021 to 9.8% in 2022. The government is

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Sri Lanka's Government Collapse A Mixed Picture For Markets

Country Risk / Sri Lanka / Mon 11 Jul, 2022

Key View

  • The resignation of Sri Lanka's president and prime minister will lead to an interim opposition-led unity government, which will enjoy somewhat greater political capital to implement a potential deal with the IMF.
  • However, shortages of fuel, power, and foreign currency will continue in the immediate term, which will keep protest
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