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Monthly Economic Update - December 2019

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3 KEY INSIGHTS

  • Ceylon Chamber Optimistic that Tax Revisions will Revive Growth; Reforms required to maintain growth momentum

  • Exports Contract for a Fourth Straight Month in October 2019

  • India’s Q2 GDP Growth Falls to a Six-Year Low

 

Sri Lankan Economy

Ceylon Chamber Optimistic Recent Tax Revisions Will Stimulate Growth: The slew of tax proposals put forward as part of the recent stimulus package will help revive economic growth and activity in the short-term. The positive benefits accrued from the near-term fiscal stimulus will need to be sustained over the medium and long-term by focusing on continuing progressive reforms on several key agendas including but not limited to those related to local and foreign investment, the expansion of exports and productivity enhancements in the public sector.

40% of Sri Lanka’s Households in Agriculture: The first Agriculture Household survey (2017) conducted by the Department of Census and Statistics revealed that there was 2.1 Mn agricultural households in Sri Lanka, which accounted for 38% of the country’s population.

Exports Contract for a 4th Straight Month: Total exports in October 2019 contracted marginally on a Y-o-Y basis but continued the declining trends seen for exports since July 2019. Despite this, the trade balance contracted further owing to the slowdown in imports.

Tourist Arrivals Shows Recovery in November 2019: Arrivals fell by 9.5% in November 2019 (with a near 50% monthly rise relative to Oct-19) compared to the year before showing early signs that the sharp slowdown recorded since April 2019 is now recovering.

 

Global Economy

India’s Q2 GDP Growth Falls to a 6-Year Low: India’s GDP growth in Q2 of 2019 slipped for the seventh consecutive quarter, falling to 4.5%, its slowest pace in six years. Fall in consumer demand; drop in manufacturing, weak private investment and drop in exports due to global slowdown are among the reasons for this slowdown.

USA Imposed Punitive Tariffs on EU: The USA imposed USD 7.5 Bn tariffs on EU goods, in response to EU subsidies given to the aircraft manufacturer, Airbus.

2019 Concludes a Decade of Exceptional Global Heat: The year 2019 concludes a decade of exceptional global heat and extreme weather conditions according to World Meteorological Organization (WMO). Their findings suggest an increase of 3 degrees to 5 degrees Celsius by the end of the century.

 

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The Ceylon Chamber of Commerce

Economic Intelligence Unit

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