Sri Lanka’s budget for 2011, announced today, aims to sustain the upswing by cutting taxes and by lifting private sector investment. While GDP growth will probably stay rapid next year, the budget reforms do not look bold enough to significantly reduce the fiscal deficit. Accordingly, most of the burden of keeping inflation low will continue to fall on the central bank. We still expect that policy interest rates will have to move up significantly over the next 12 months.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.