Sri Lanka’s revival in economic activity is envisaged supported by appropriate fiscal and monetary measures, improved business confidence and political stability in 2020.
The economy is expected to reach its full capacity over the medium term, benefitting from the low and stable inflation environment, a competitive exchange rate, low lending rates as well as improved consumer and investor sentiment. Central Bank announced today.
A recovery in domestic economic growth is expected As suggested by available indicators and latest estimates, domestic economic activity has remained subdued in the fourth quarter of 2019, primarily with sub par growth in Agriculture and Industry related activities
The Monetary Board of the Central Bank at its meeting held on 29 January 2020, decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 50 basis points to 6.50 per cent and 7.50 per cent, respectively.
The Board arrived at this decision following a careful analysis of current and expected developments in the domestic economy and the financial market as well as the global economy.
This decision supports a continued reduction in market lending rates, thereby facilitating the envisaged recovery in economic activity given the favourable medium term outlook for inflation, which is well anchored within the 4-6 per cent range.
Global monetary policy continued to remain accommodative amidst concerns over low economic growth downward revisions to global growth projections were announced in the January 2020 update of the World Economic Outlook (WEO) of the International Monetary Fund (IMF), owing to weaker than expected growth across emerging market economies, especially India.
Global economy is estimated to have grown by 2.9 per cent in 2019 and projected to grow by 3.3 per cent and 3.4 per Economic Research Department 30.01.2020 2 cent in 2020 and 2021, respectively.
Meanwhile, global growth prospects have been further threatened by the spread of coronavirus originated in China.
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(LI)