SL’s GDP growth to reach 5% in 2018 – ADB

The Asian Development Asian outlook for 2017 (update) predicts that the GDP growth for Sri Lanka at the end 2017 would be 4.5 and it would increase to 5% in end 2018.

According to this report GDP grew by 3.8% in the first quarter of 2017 and 4% in the second to hold growth in the first half of 2017 to 3.9% year on year, unchanged from the 2016 outcome.

The industry grew by 6.3% in the first quarter and 5.2% in the second to bring first-half expansion to 5.8%. Garment production strengthened slightly in the second quarter but was offset by a marked slowing in construction, to 9.3% from 16.1% in the first quarter. Services expanded by 3.5% in the first quarter and 4.5% in the second for 4% growth in the first half. An increase in financial services including insurance and in government services offset slippage in wholesale and retail trade and in hospitality.

Faster growth in the large service sector in the second quarter provided lift for 4% GDP growth in the period despite slackening agriculture and industry.

Exports grew by 5.2% year on year in the first half of 2017, rebounding from a 5.8% fall in 2016 as better global prices spurred agricultural exports. Meanwhile the updated report says that the developing Asia is forecast to expand by 5.9% in 2017 and 5.8% in 2018.

The outlook for developing Asia supports optimism. Rather than the slight growth moderation forecast in Asian Development Outlook 2017 in April, this update envisages a slight uptick this year.

Growth in the region is set to pick up from 5.8% in 2016 to 5.9% this year and 5.8% in 2018. Excluding the high-income newly industrialized economies, the region is expected to expand by 6.4% in 2017 and 6.3% in 2018. “Risks to developing Asia’s outlook have become more balanced since April,” says Takehiko Nakao, President Asian Development Bank.

Asia’s infrastructure needs amounts to $1.7 trillion per year until 2030 to maintain its growth momentum, reduce poverty, and respond to climate change.

“However, even factoring in funds saved through public finance reform or received from multilateral agencies, a significant financing gap remains. The public–private partnership (PPP) can help to fill the infrastructure gap.”

“The success of the approach depends on governments identifying projects suitable for it, engaging qualified private partners, and instituting the right process. The Asian Development Bank is a frontrunner in supporting the development of PPP in the region.”