Apr 01, Hong Kong: The Asian Development Bank (ADB) today launched its flagship economic publication for this year, the Asian Development Outlook 2014.
The annual Asian Development Outlook provides a comprehensive analysis of economic performance for the past year and offers forecasts for the next 2 years for the 45 economies in Asia and the Pacific that make up developing Asia.
It provides a comprehensive analysis of macroeconomic issues in Asia, including growth projections, by country and region.
This year's Outlook projects the region's growth to edge up from 6.1% in 2013 to 6.2% in 2014 and 6.4% in 2015.
For Sri Lanka, the report says an improving external environment, higher investments, and a recovery in domestic consumption will sustain a rapid pace of GDP growth in the next 2 years.
An improving external environment will lift trade, but the current account deficit will expand on higher imports while fiscal consolidation will focus on revenue enhancement.
The recent relaxation in monetary policy will allow more lending to the private sector and provide an impetus for expansion, the Outlook for 2014 noted.
The government's focus on infrastructure and post conflict reconstruction and development has supported the expansion and will continue to drive growth in the medium term.
As tourist numbers continue to rise rapidly and large hotel projects in the pipeline open their doors, economic growth and foreign exchange earnings from tourism will continue to be buoyant over the next several years, the Outlook predicts.
The inflation is expected to remain in the middle single digits in 2014 and 2015. Broadly stable international fuel and food prices will help to keep inflation in check over the next 2 years, assuming normal weather.
According to the report, foreign direct investment is expected to continue to expand as the economy strengthens and the investment climate improves. Exports, having recovered since mid-2013, will continue to expand.
With these factors pushing up income, private consumption will pick up after slowing in 2013 and contribute significantly to higher growth and the economic growth is expected to accelerate to 7.5% in 2014 and maintain that rate in 2015, according to the ADB analysis.
Fund the full section of Asian Development Outlook 2014 on Sri Lanka here.