IMF sees Sri Lanka's economy slowing to 4.5 percent in 2016, 4.8 percent next year

The International Monitory Fund on Friday revised down Sri Lanka's economic growth to 4.5 percent in 2016, slower than the earlier estimated 5 percent and said external factors could put more pressure on the Indian Ocean island nation next year.
The global lender expects Sri Lanka's economy to grow at 4.8 percent in 2017, slower than government's expected 6.3 percent and said the risks to the outlook remain significant on both domestic and external fronts.
"Our earlier forecast was, growth would be above 5 percent but now we are saying growth will be slightly lower than 5 percent ...around 4.5 percent GDP growth this year and next year we are expecting a little higher, say 4.8," Jaewoo Lee, IMF Sri Lanka mission chief, told reporters in Colombo over a video conference. "External environment is not as favourable as we used to think and that is the main reason for slight downward revision of the GDP growth."
The $82 billion economy expanded 2.6 percent in the second quarter from a year earlier, slowing from 5.2 percent in the first, amid tight fiscal and monetary policy this year. Sri Lanka's economy grew 4.8 percent in 2015 and the government projects the economy to grow at 5 percent in 2016. The IMF said key domestic risks included lack of progress in revenue-based consolidation, a further decline in growth, and additional losses from state-owned enterprises (SOEs), which would call for more difficult adjustments.