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Central Bank downgrades Sri Lanka’s 2018 growth target rate by 0.5%

July, 10, 2018

Amidst World Bank’s projection of Sri Lanka’s growth at 4.3% in 2018, and the Global Lender largely controlled by Western Economies - the International Monetary Fund (IMF) predicting the same at 4% earlier this month, Sri Lanka’s Central Bank Governor Dr. Indrajit Coomaraswamy had said that Central Bank had to revise down the growth target for 2018 to 4%-4.5% from an initial forecast of 4.5%-5%. According to him Central Bank will announce the new growth targets by August 2018.

Addressing reporters at the monetary policy announcement last Friday, Dr. Indrajit Coomaraswam said that moderate first quarter performance has prompted the Central Bank to revise growth rates. He further cautioned against reducing interest rates to boost growth as it could lead to a balance of payments crisis.

Sri Lanka’s economy grew 3.2% in the first quarter of 2018, decelerating from 3.5% seen in the fourth quarter of 2017 and the 3.3% growth in the first quarter of 2017.

 

- Reporting by Devendra Francis