Sri Lanka Infrastructure Report Q4 2017

BMI Industry View

Table: Infrastructure - Construction Industry Forecasts (Sri Lanka 2016-2026)

Risk/Reward Index

Table: Infrastructure Risk Reward Index (Sri Lanka 2017-2017)

Industry Forecast

Construction And Infrastructure Forecast Scenario

Latest Updates

Table: Construction And Infrastructure Industry Data (Sri Lanka 2016-2026)

Structural Trends

Industry Risk Reward Index

Asia Infrastructure: Gradual Improvements As Markets Mature

Methodology

Infrastructure Forecast Methodology

Industry Forecast Methodology

Sector-Specific Methodology

Infrastructure Risk/Reward Index

BMI View: We forecast robust growth averaging more than 9% per annum in Sri Lanka's constructionindustry over the coming decade as the island-nation continues to attract strong investor interest from bothIndia and China, which are vying for market share and influence in the Indian Ocean. However, we notethat growing threats to political stability due to a more fragmented government and rising nationalisticsentiment pose downside risks to our positive view.

Forecast and Latest Updates

Transport projects will be the primary driver of growth in Sri Lanka's construction industry over our 10-year forecast period up to 2026, with high-value road, rail and port projects central to facilitating widerinvestment in residential and non-residential building across the country. Rising external debt poses adownside risk given the country's increasing need to direct funds towards servicing costs, jeopardisinglong-term investment.