ADB economists welcome SL's strong recovery; say higher investments critical

Say domestic demand supported growth, thus far completing eight quarters of upturn in economy

- BY NISTHAR CASSIM

• Q2 significantly outperformed earlier forecasts

• 'Flag-off risks to outlook include stronger-than-expected effects from US tariffs, global economic uncertainty, energy price volatility and domestic weather-related disruptions

• Pin pursuing structural reforms key to make economy more efficient

• Attracting high investments especially will be critical, along with greater diversification of exports

• Expect CBSL's monetary policy stance will also help inflation to gradually improve

ECONOMISTS at the Asian Development Bank (ADB) have welcomed Sri Lanka's strong and resilient recovery so far this year amidst persistent global uncertainty.

They said that domestic demand supported growth, thus far completing eight quarters of upturn in the economy. It was pointed out that the economic recovery is projected to continue on a strong footing, but growth is expected to slow next year due to global headwinds.

ADB Senior Country Economist Lilia Aleksanyan in an interview with the Daily FT said economic momentum is supported by recovering consumption, strong remittances, and rising private credit.

On the other hand, US tariffs have settled at historically high levels and trade uncertainty remains elevated for Sri Lanka.