IMF downgrades Sri Lanka’s growth to 2.7%

October, 23, 2019

The International Monetary Fund (IMF), downgraded sri Lanka’s economic growth in 2019 to 2.7%, down by 0.8% from an earlier projection in April.

However, The IMF expects the Sri Lankan economy to rebound in 2020, hence forecasting a 3.5% growth, but that projection was subjected to a downgrade of 0.5% from its World Economic Outlook April release.

The IMF’s latest economic assessment for Asia and the Pacific highlights rising downside risks to growth in the context of a synchronized global slowdown. Growth in Asia softened in the first half of 2019, driven by a pronounced decline in fixed investment and exports. Consumption largely held up, helped by supportive policies across the region.

The report finds that Asia is projected to grow at 5% in 2019 and 5.1% in 2020—0.4 and 0.3% point lower than projected in April.

This would constitute the slowest pace of expansion since the global financial crisis. Downward revisions for growth in Asia are larger than for the global average and particularly pronounced in investment and trade.

Nonetheless, Asia still remains the fastest-growing major region in the world, accounting for more than two-thirds of global growth in 2019. China alone accounts for 39 % of global growth, India 16%, and ASEAN 10 %.

The IMF forecast Asian GDP to grow at 5% in 2019 and 5.1% in 2020, which is 0.4% and 0.3% point lower than projected in April.