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.
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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.