Domestic economic activity rebounce to continue -CBSL
The rebound of domestic economic activity witnessed in the latter part of 2023 is expected to continue, assisting the economy to gradually reach its potential over the medium term with the help of appropriate policies, says the Central Bank at a discussion with the media on its Monetary Policyyesterday.
The overall real GDP growth for 2023 is anticipated to be moderately negative, representing a milder contraction compared to 2022, while economic growth is expected to remain positive during 2024.
“A major factor that influences the economic outlook is the continuation of the IMF-EFF arrangement and the progression of the envisaged structural reforms.“Any disruption to this programme would create high economic costs to the country due to growth derailment, loss of confidence, and the protraction of negative investor sentiments.”
Sri Lanka successfully reduced inflation to single-digit levels in 2023 and restored price stability from around 70% a year ago.The CBSL now predicted that the Headline inflation is projected to stabilize around the targeted level of 5% over the medium term.
“Inflation may deviate from the target in the near term mainly due to the recent tax amendments and supply side disruptions. However, it is unlikely to persist due to subdued demand conditions, as the economy is projected to operate below its full capacity for an extended period.”
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