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MONTHLY ECONOMIC UPDATE - April 2019

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3 KEY INSIGHTS

  • Possible implications for tourism, FDI and growth from Easter Sunday attacks; too early to quantify impact.

  • Trade-gap falls to a five-year low in February as imports contained.

  • Oil price on the rise.  Brent oil up 10% so far this month.

Sri Lankan Economy  

Impact on the Economy Post Easter Day Attacks: As highlighted by the CBSL Governor, it is too early to quantify the full economic impact of the recent attacks. The immediate concern will be on the tourism industry while there will be more short to long-term implications on indicators such as growth and FDI.

Trade Gap Narrows to 5 Year Low: Trade deficit narrowed by 58% (Y-o-Y) in February 2019, to the lowest level in the last five years due to a sharp decline in imports owing to policy measures to discourage certain imports.  

CBSL Policy Rates Remain unchanged: The Monetary Board Decided to maintain policy interest rates at their current levels at the last meeting held on 8th April.

Economic Growth to Recover Gradually- ADB: Sri Lanka’s economic growth is projected to rise to 3.6% in 2019 and further to 3.8% in 2020. This forecast for a gradual recovery is supported by a turnaround in the construction sector and continued growth in services. The impact of Brexit on the overall economy is estimated to be marginal.
 

Global Economy

Trade Growth to fall in 2019: WTO expects global trade growth to fall to 2.6% in 2019, due to rising trade tensions and increased economic uncertainty. In 2020, the trade growth is expected to rebound to 3% depending on an easing of trade tensions.

South Asia Needs More Exports: South Asia needs to increase its exports to sustain its high growth and reach its full economic potential, says the World Bank. South Asia is the world’s fastest growing region, with growth set to step up to 7% in 2019, 7.1% in 2020 and 2021.

China’s Growth Stabilizes in Q1 2019: The GDP of China for Q1 of 2019 registered a growth of 6.4% from a year ago. Policy stimulus spurred growth in fixed-asset investment while the bulk of the improvement observed in Q1 was carried by state-owned enterprises.

Oil Prices Rose in March: During March the OPEC Reference Basket rose by 4% to USD 66.37 per barrel, amid strengthening oil market fundamentals, which were supported by the commitment of OPEC and participating non- OPEC countries to restore global oil market stability. Brent oil prices are up 10% so far in April (as at 23 April)

Read Full Update

 

The Ceylon Chamber of Commerce

Economic Intelligence Unit

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