The Asian Development Bank (ADB) kept its economic growth forecast of 7 percent for Sri Lanka in a supplement to its flagship Asian Development Outlook 2015 released in March.
However, the brief report noted that the current political environment presents some downside risks.
“…political transition in Sri Lanka causes private investors to take a wait-and-see approach to new investment,” the report said.
Sri Lanka’s economy is forecasted to grow at 7.3 percent in 2016.
Meanwhile, the ADB raised slightly its 2015 forecast for South Asia to 7.3 percent against 7.2 percent in March, as an expected strong outturn in Bangladesh offsets weak growth in disaster-hit Nepal and with India’s economy seen supported by strong farm growth and fresh investments.
However, the report cut its 2015 and 2016 growth forecasts for China and the rest of Asia, largely as a result of the slower than expected growth in the region’s largest economy and in developed economies elsewhere.
Developing Asia is now expected to grow 6.1 percent and 6.2 percent this year and in 2016 against the ADB’s March forecast of 6.3 percent for both years.
Growth in East Asia is still seen as subdued with lower-than-forecast output across the region. China’s growth is seen moderating to 7.0 percent this year and 6.8 percent in 2016 compared to March estimates of 7.2 percent and 7.0 percent, the bank said.
Southeast Asia’s growth is seen a shade weaker at 4.6 percent this year and 5.1 percent next year compared to March estimates of 4.9 percent and 5.3 percent following disappointing economic output in the region so far this year, the ADB said.