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Q3 strength unlikely to last, CBSL cuts again

GDP growth rebounded strongly across most of Emerging Asia last quarter, but we doubt this strength will last. We expect growth to slow in the near term as weak exports and tight monetary and fiscal policy weigh on demand. Meanwhile, Sri Lanka’s central bank cut interest rates again today and appeared to call a pause in the loosening cycle. But with inflation very low and the economy struggling, we expect more policy easing next year.

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