The prevailing drought and external factors such as Trump policies and elections in Europe could have some effect on the growth target set for this year, Central Bank Deputy Governor Dr. Nandalal Weerasinghe said.
Central Bank Governor Dr. Indrajit Coomaraswamy at the media briefing to unveil the ‘Road Map’ for 2017 early this year, said the bank’s economic growth forecast for this year is between 5.5 to 6 percent.
The International Monetary Fund raising concerns about the situation faced by Sri Lanka revised its forecast for Sri Lanka from 5 percent to 4.5 percent in 2016 and from 5.5 percent to 4.8 percent this year. However, the forecast came with certain amount of caution as possible downside effects from the long spell of drought and volatility in the global economy could hold the breaks on the growth trajectory.
“We are confident of reaching the target envisaged for this year as the economy showed improvement towards the latter part of last year.
We are expecting the fourth quarter results of 2016 by mid this month and thereafter, we could have some perception of the economic growth this year,” Dr. Weerasinghe said.
He said the return of the GSP Plus concessions and the national export development strategy will have a positive impact on the export performance.
The export development strategy for the next five years is being prepared by the Export Development Board, the apex body for export promotion in the country.
The GSP Plus concession is expected to be granted back to Sri Lanka by the first quarter this year. The ban on fishery exports by the European Union was lifted last year enabling Sri Lanka to boost exports to the region.
With regard to the visit of the IMF Managing Director Christine Lagarde this month Dr. Weerasinghe said he was not aware of the visit except for the IMF delegation which is currently in the country for review of the economy which takes place once in six months.
According to media reports, Lagarde is expected to visit Sri Lanka on March 21.
Prime Minister Ranil Wickremesinghe and Finance Minister Ravi Karunanayake held discussions with Lagarde on economic prospects in the country at the World Economic Forum in Davos early this year.
The IMF approved a three-year USD 1.5 billion Extended Fund Facility mid last year to support the depleting foreign reserves and strengthen macro economic stability. So far two installments have been disbursed by the IMF.