* Monetary policy could ease 100bps, exporters hit by GSP Plus withdrawal
March 7, 2013, 12:00 pm
![article_image]()
![]()
The economic slow down experienced in 2012 is expected to intensify this year on high credit costs, a weak currency and the fragile state of export markets, a leading ratings and research agency said.
Business Monitor International (BMI), a leading, independent provider of proprietary data, analysis, ratings, rankings and forecasts covering 175 countries and 22 industry sectors in a special report on Sri Lanka pointed out that economic growth would reach 5.4 percent this year, lower than estimates of the IMF (6.25 percent) and government ( 7/7.5 percent).
“We do not see the island’s economic growth turning up until H213 at the very earliest, implying that the ongoing slowdown will likely intensify in H113,” the agency, specialising in emerging markets, economics, country risk, forecasts, analysis, industry research and company intelligence said.
“We are keeping to our 5.4% full-year real GDP growth forecast for the year. The island’s economy is still feeling the pinch on multiply fronts – the high credit costs, the weak Sri Lankan rupee, and the fragile state of developed markets,” it said.
“With price concerns gradually coming off the table, we believe that the primary focus of the Central Bank of Sri Lanka (CBSL)’s policies over the coming twelve months will be fixed on economic growth. We are projecting 100 basis points (bps) worth of additional easing in 2013, taking the reverse repo rate to 8.50% by end-2013. Crucially, the CBSL’s annual Road Map signals further loosening of monetary policy in the months ahead.
“Currency stability is likely to be the overriding theme going forward as the central bank looks to foster some sense of it after a fairly volatile 2012. The CBSL explicitly expressed exchange rate stability as one of its policy priorities in its annual Road Map for the year ahead, reiterating its willingness to intervene if need be.
“We have long cautioned that the political unassailability of the ruling United People’s Freedom Alliance (UPFA) greatly increases the risk of government overreach. Recent developments, such as the highly controversial impeachment of the chief justice, have only bolstered our view.
“More than two and a half years after the EU decided to withdraw preferential tariff benefits to Sri Lanka, it appears that the country’s exporters are now beginning to feel the economic squeeze. The ruling government’s inadequate progress on the human rights front suggests to us that these privileges are unlikely to be reinstated any time soon.”
![]()
![]()
FRIDAY, 08 MARCH 2013
Seven suspects including three police officers were arrested today in connection with the Rs.10 million robbery in Slave Island last month, police said.
Police spokesman Buddhika Siriwardena said a police team led by Colombo Crime Division DIG Anura Senanayake made the arrests at various locations in Colombo.
Two traffic police officers and one Ministerial Security Division (MSD) member were among those arrested.
The police spokesman said a part of the stolen money had been recovered while investigations are continuing to retrieve the balance.
In a daring daylight robbery, a group led by a person posing as a traffic policeman robbed Rs. ten million from a businessman in the Gangaramaya area in Slave Island on February 12.
The businessman was travelling with his wife towards the Gangaramaya Temple area with his wife when a traffic policeman had ordered them to stop the van.
Within minutes a defender had come and parked in front of the van. Four men had got down from the vehicle and pulled away the driver from his seat.
The four men had got into the van with the person dressed as a policeman and fled towards Pitakotte where the driver was thrown out of it.
According to the victim, the suspects had shouted at him saying ‘If you want the van come to Peliyagoda and collect it’.
He had then lodged a complaint at the Colombo Crime Division (CCD). The van was found abandoned in Dematagoda a few hours later.(Sanath Desmond)
Related story