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Central Bank says Sri Lanka economy to grow 3.5-pct in 2020

Economy News from Sri Lanka: In 2020, a new Central Bank report says, the Sri Lankan economy is projected to grow by about 3.5 percent in real terms. “Growth is expected to be broad-based and all major economic activities should make a positive contribution,” he says.

“Furthermore, investor confidence, which has been adversely affected by domestic uncertainty, is expected to improve, boosting private investment.” The anticipated increase in government spending prior to national elections, along with picking up private spending in line with consumer behavior standardization, will enhance domestic demand over the year, the Bank adds.

The economy would also continue to benefit from preferential trade agreements with major trading partner economies, as well as global oil prices ease.

In addition, the Bank says that diversifying the export portfolio and improving the tradable sector would contribute to sustaining improvement in the economy’s external sector.

The new report also notes that the recovery of the agricultural sector is expected for 2020. According to the Department of Agriculture, the surplus production of the 2018/19 Maha and 2019 Yala season resulted in the availability of enough rice to meet household demand by January 2020.

It is also expected that industry-related economic activities will continue the positive momentum in 2020, assuming that confidence in investors will improve.

“It is expected that growth in manufacturing and construction activities will drive industry growth that benefits from GSP+ concessions as well as the realization of government construction projects as planned, providing an impetus for private construction activities,” the report says.

Construction activities are expected to grow at a higher rate with the acceleration of government-initiated development projects such as the continuation of the Central Expressway and the first phase of the Light Rail Transit System.’ As for service-related activities, growth is expected to be broad-based and broadly supported by economic activities such as wholesale and retail trade, financia.

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