The Asian Development Bank (ADB) lowered the economic growth forecast for Sri Lanka due to weak industrial performance and fiscal consolidation.
In a summary of growth in South Asia, the Asian Development Outlook 2016 Update said,
“While Bangladesh and Pakistan now see slightly faster expansion in 2016 than anticipated, growth prospects for Sri Lanka edge lower on weak industrial performance and fiscal consolidation.”
Noting Sri Lanka’s high external debt, the report added,
“For Sri Lanka, where a significant share of debt is external, additional pressure is likely to come from the interest rate cycle of the US Federal Reserve. Interest rates pose less risk to India and Pakistan, where public debt is held by domestic investors.”
See full ADB report here.