SCB upgrades Lankan growth forecast after surprise 2013

Wednesday, 26 March 2014 00:43 - - {{hitsCtrl.values.hits}}

Standard Chartered Bank (SCB) has revised its forecast for Sri Lanka’s GDP growth for 2014 following a surprising rebound in 2013. “2013 GDP growth, released on 17 March, surprised on the upside at 7.3% (versus our forecast of 6.8%). We have therefore raised our 2014-16 growth forecasts),” SCB’s latest economic alert on Sri Lanka stated. SCB has revised 2014 GDP growth forecast to 7.5% from 7% previously and 7.8% in 2015 from 7.2% earlier. SCB also said the latest GDP and inflation data suggests that the CBSL is facing an improving growth-inflation trade-off. “The increase in GDP growth in Q4-2013 is in contrast to signals sent by private credit growth, which remains extremely weak. Other indicators of domestic demand such as import growth and new car registrations have also failed to show a meaningful increase. We expect some of the divergence between GDP growth and proxy growth indicators to be erased by a gradual improvement in the indicators. We also expect quarterly GDP growth rates to moderate from Q4 levels going forward,” SCB said. See full report on P17

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