The Investor Sentiment - Equity and investments forum for Sri Lankans

Join the forum, it's quick and easy

The Investor Sentiment - Equity and investments forum for Sri Lankans
The Investor Sentiment - Equity and investments forum for Sri Lankans
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Please send an email to if you face any technical difficulties when posting
Display results as :
Advanced Search
Latest topics
Coronavirus UpdatesFri May 21, 2021 11:24 amThe Invisible
Browns Investments updateTue Feb 02, 2021 2:38 pmYin-Yang
ACL CablesWed Dec 30, 2020 7:22 pmsubash
Merry Christmas to AllTue Dec 29, 2020 4:53 pmchutiputha
Trading Journal Sat Dec 12, 2020 11:33 pmxmart
HVA FoodsFri Dec 04, 2020 10:25 amThe Invisible
Tokyo CementMon Nov 23, 2020 9:42 amRajapaksap
Insider Dealings Fri Nov 20, 2020 2:30 ampjrngroup
UML United MotorsTue Nov 10, 2020 8:50 amThe Invisible
ExpolankaMon Nov 09, 2020 8:46 pmsmallville

Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

Go down
Top contributor
Top contributor
Posts : 3775
Join date : 2014-02-24

Central Bank expects V-shaped recovery amid pent-up demand Empty Central Bank expects V-shaped recovery amid pent-up demand

Tue May 26, 2020 8:32 am

Central Bank expects V-shaped recovery amid pent-up demand

26 May 2020 12:00 am -

Says recovery could kick in from second half of this year amid pent-up demand due to lockdowns
Global economic recovery also expected to add some tailwind to local economy from fourth quarter
Says govt. has capacity to honour its debt obligations this year
SL has repaid US $ 1.6bn debt during first four months and has US $ 3.3bn in remaining debt for remainder of year
Authorities plan SL’s next ISB late this year or early next year with rebound in global economy

Although the Sri Lankan economy is expected to contract in the ongoing quarter, due to the coronavirus-induced lockdowns, the Central Bank expressed confidence that the economy could be off to a V-shaped recovery from the second half of the year, while the authorities draw plans to launch the country’s next sovereign bond towards the latter part of the year or early next year.

“A V-shaped recovery is projected for Sri Lanka,” said Central Bank Economic Research Director Dr. Chandranath Amarasekara. The Central Bank projects the pent-up demand to kick in from the third quarter in the domestic economy, as the lockdown orders ease and people restart spending on things that they had to forgo setting forth somewhat a faster recovery than one would have typically expected.

At the same time, the global economic recovery is also expected to add some tailwind from at least the fourth quarter.

“With the removal of lockdowns and with the normalcy returning, the domestic economic activity will drive growth in the second half of the year. We expect some recovery in the global economic activity in the fourth quarter and Sri Lanka will also benefit from the beginning of this global recovery in the fourth quarter,” Dr. Amarasekara told a webinar on the state of the economy, last week.

As opposed to certain quarters that projected protracted economic pain from the pandemic, the Central Bank appears to believe that the economic setback caused by the new coronavirus is temporary.

Unlike in any other economic crises in the past, what many have yet to grasp this time is that economic actors remain desperate to return to normalcy, enormous fiscal and monetary stimulus have been launched, borrowing cost hovers near zero levels, regulations are being eased and growth-induced policies are put into practice, in a bid to hyper-accelerate the growth.

“We expect the setback from the pandemic to be temporary, although there will be a rethinking of the economic policies and the strategies of the government as well as the private sector. But in any case, we expect that from 2021, with appropriate reforms, the country will revert to a sustained high growth path,”
Dr. Amarasekara said.

The Central Bank in April revised down its growth projection to 1.5 percent for 2020.

The Central Bank’s projections show economic growth returning to 4.5 percent in 2021 and then rising to 6.0 percent and above in the following years.

Meanwhile, Senior Deputy Governor Dr. Nandalal Weerasinghe reiterated that the government has the wherewithal to comfortably settle its remaining debt obligations for the year.

The country has repaid US $ 1.6 billion debt during the first four months of the year and has US $ 3.3 billion in remaining debt obligations for the remainder of the year.

He said the government is working with multiple multilateral and bilateral partners while the Central Bank is negotiating SWAP lines to get the reserves back up to the levels at the beginning of the year.

Sri Lanka has already begun negotiating a SWAP line with the Reserves Bank of India, which is expected to materialise soon.

The Central Bank also hopes to launch the country’s next sovereign bond sale in the latter part of this year or early part of next year. “With all these plans, we are very confident we would be able to meet all these debt-servicing obligations during the balance period and once the situation improves towards the end of this year or early next year, we would have (the) access to international capital markets and we will be able to raise not only the official credit lines and concessional lines but also the commercial financing for us to meet the reserve obligations,” Dr. Weerasinghe said.

Back to top
Permissions in this forum:
You cannot reply to topics in this forum