Sri Lanka Quarterly Economic Update - October-November 2012

Institutional Document | November 2012

The QEU for October/November 2012 observes economic slowdown due to tight monetary policy restricted domestic credit expansion and weak external demand.

The Quarterly Economic Update (QEU) provides a comprehensive and updated analysis of the recent economic performance of Sri Lanka. The QEU for October/November 2012 observes economic slowdown due to tight monetary policy restricted domestic credit expansion and weak external demand. The QEU also reviews the 2013 budget.

Findings

The gross domestic product (GDP) growth decelerated to 6.4% during the second quarter of 2012 due to tight monetary policy, restricted domestic credit expansion, and weak external demand.

The year-on-year inflation rate peaked in July 2012, after which food prices stabilized as drought conditions eased. Exports, imports, and the trade deficit all declined. Robust capital inflows supported foreign exchange reserves. The 2013 budget reiterated the Government's commitment to fiscal consolidation. Budget proposals address bottlenecks in the economy, thereby encouraging further development toward achieving upper-middle income status for the country. Budget focuses on the critical sectors of renewable energy, urban development and water supply, and skills development.

Contents 

  • Macroeconomic Developments
    • Overview
    • Sector Performance and Economic Growth
    • Inflation
    • Monetary and Financial Developments
    • External Sector Developments
    • Fiscal Performance
  • 2013 Budget
    • Overview and Indicators
    • Budget Proposals