Sri Lanka Business Forecast Report Q2 2010 : Market Research Report

Sri Lanka Business Forecast Report Q2 2010

Published by: Business Monitor International

Published: Feb. 5, 2010 - 70 Pages

Executive Summary: Reconstruction To Boost Growth In 2010-2012
Chapter 1: Political Outlook: Domestic Politics; Key Challenges For The Next President; Rebuilding the war-torn eastern and northern parts of Sri Lanka and addressing the Tamil minority’s desire for increased; autonomy will be key priorities for the next president.
Table: Political Overview
Chapter 2: Economic Outlook: Economic Activity; Strong Growth Expected As Reconstruction Starts; We are now forecasting somewhat stronger growth in 2010, having raised our real GDP growth forecast from 4.4% to 5.4%; on the back of expectations of higher government and private consumption.
TABLE: ECONOMIC ACTIVITY: Fiscal Policy; Pork Barrel Politics Equals Higher Fiscal Deficit; Substantial expenditure pledges in the run-up to the presidential elections on January 26 have prompted us to revise up; our nominal fiscal deficit forecast for 2010 from 6.3% to 6.8% of GDP.
Table: FISCAL POLICY: Monetary Policy; CBSL To Begin Tightening In H210; We expect the Central Bank of Sri Lanka to remain in accommodative mode through H110, but to begin hiking rates in H210.
Table: MONETARY POLICY: Balance Of Payments; C/A Deficit To Widen In 2010; We expect Sri Lanka to post a current account deficit of US$1.1bn (2.2% of GDP) in 2010 after a shortfall of a mere; US$165mn (0.4% of GDP) in 2009.
Table: CURRENT ACCOUNT
Chapter 3: 10-Year Forecast: The Sri Lankan Economy To 2019; Post-War Investment To Lift Growth In 2010-12; We expect Sri Lanka to experience a steady recovery from the global economic downturn in 2009, with real GDP growth; peaking at 6.5% in 2012 on the back of increased capital investment following the end of the civil war.
Table: Long-Term Macroeconomic Forecasts
Chapter 4: Special Report: Political Risk In The Next Decade; What To Expect In 2010-2019
Table: Countries Facing Major Leadership Succession In 2010-2019
Table: Countries At Risk Of Major Political Upheaval
Table: Countries At Risk Of Interst ate Conflict Or Heightened Bilateral Tension
Table: Cou ntries Facing Secess ionist Or Auto nomy Moveme nts , Insu rge ncies , Or Civil Wars
Table: Pivot al States
Chapter 5: Business Environment: Business Environment Outlook
Table: BMI BUSINESS AND OPERATIONAL RISK RATINGS: Institutions
Table: BMI LEGAL FRAMEWORK RATINGS: Infrastructure
Table: LABOUR FORCE QUALITY: Market Orientation
TABLE: ASIA, ANNUAL FDI INFLOWS
Table: BMI TRADE RATINGS
TABLE: TOP EXPORT DESTINATIONS: Operational Risk
Chapter 6: Key Sectors: Information Technology
Table: IT Sector
Chapter 7: BMI Global Assumptions: Global Outlook; 2010 Looking Rosier
TABLE: GLOBAL AND REGIONAL REAL GDP GROWTH
TABLE: developed market exch ange rates
Table: Emerging Market Exch ange Rates
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES
TABLE: EMERGING MARKETS

Abstract

We estimate real GDP in 2009 to have come in at 3.3% and are expecting the economic recoveryto continue in 2010 in 2011, with our real GDP forecasts standing at 5.4% and 6.1% respectively.We expect real GDP growth to peak at 6.5% in 2012 as the increase in capital investment followingthe end of the civil war in May 2009 starts to decelerate. However, there are threats to our projectionsof average growth of 6.3% in 2013-2019, primarily in the form of a deteriorating businessenvironment. Regarding industry, while Sri Lanka has potential to develop its tourist sector on theback of increased security, we see threats to the competitiveness of the textile sector.

R ebuilding the war-torn eastern and northern parts of Sri Lanka and addressing the Tamil minority’sdesire for increased autonomy will be the top priorities for the next president, to be elected onJanuary 26. Other priorities in the near term will be to repair relations with Western capitals, whichhave been highly critical of human rights transgressions committed by the army against Tamil civiliansand prisoners. Over the medium term, the next president will need to address the high level ofbureaucracy and corruption, which is holding back private enterprise and economic growth.

We are now forecasting somewhat stronger growth in 2010, having raised our real GDP growthforecast from 4.4% to 5.4% on the back of expectations of higher government and private consumption.With the reconstruction of the island stimulating capital investment and private consumption,we expect growth to accelerate to 6.1% and 6.5% in 2011 and 2012 respectively. Increased importsof investment goods should see the current account deficit widen to US$1.1bn (2.2% of GDP) in2010 and US$1.7bn (2.9% of GDP) in 2011 after a shortfall of a mere US$165mn (0.4% of GDP)in 2009.

D espite the government’s military victory over the Tamil Tigers in May 2009, which should easesecurity concerns, the underlying issues affecting Sri Lanka’s business environment are mostlyunchanged. These problems include corruption in the judiciary (and particularly in the contractbiddingprocess) as well as inadequate physical infrastructure. Although the government is pressingahead with its infrastructure programme, we foresee less improvement in cutting back governmentbureaucracy and public corruption. Sri Lanka slipped from 97th to 105th place in the World Bank’s2010 Doing Business report and a further deterioration of business conditions would pose downsiderisks to our long-term growth projections.

Get Full Details About This Report >>

US: 800.298.5699

Int'l: +1.240.747.3093

About MarketResearch.com
MarketResearch.com is an online aggregator selling over 300,000 market research reports, company profiles and country profiles from over 700 research firms. Our reports will provide you with the critical business and competitive intelligence you need for strategic planning and marketing research. Coverage includes the US, UK, Europe, Asia and global markets.

2/15/2012 - 31

Sri Lanka Business Forecast Report Q2 2010

Table of Contents

Abstract