The Sri Lankan economy recorded an expansion in the third quarter of 2023, following six consecutive quarters of economic contraction, according to the Central Bank of Sri Lanka (CBSL).
Accordingly, the economy is estimated to have grown by 1.6 per cent, year-on-year, in the third quarter of 2023, as per the GDP estimates published by the Department of Census and Statistics (DCS).
This was a broad-based expansion in economic activity supported by expansions recorded in Agriculture, Industry and Services sectors, on a year-on-year basis.
The rebound in domestic economic activity is expected to be sustained, supported by the faster passthrough of relaxed monetary policy to broader market interest rates and the resultant firming of credit demand, improvements in business and investor sentiments, improvements in supply conditions and the gradual rebound expected in external demand conditions.
The CBSL further stated that Gross official reserves (GOR) improved notably to US dollars 4.4 billion by the end of December 2023, which includes the swap facility from the People’s Bank of China (PBOC).
This strong rebound of GOR was supported by the notable net purchases by the Central Bank from the domestic forex market and the proceeds from multilateral agencies.
The Sri Lanka rupee, which appreciated by around 12 per cent against the US dollar in 2023, continued to show an appreciation so far in 2024.
Meanwhile, the merchandise trade deficit is estimated to have moderated during 2023 in comparison to 2022.
This, coupled with the notable recovery in trade in services, mainly earnings from tourism, and the strong momentum of workers’ remittances, is expected to have resulted in a surplus in the current account balance of the balance of payments for 2023.
The CBSL full report : https://shorturl.at/hkrsN (NewsWire)
