Notable economic recovery in 3rd Quarter 2020 | Daily News

Notable economic recovery in 3rd Quarter 2020

Strong economic rebound projected in 2021
Growth momentum sustained
Rupee maintains stability

A notable recovery in economic activity in the third quarter of 2020 is witnessed according to available economic indicators, Central Bank Governor Prof. W. D. Lakshman Central Bank said in a virtual meeting yesterday.

Despite this disturbance to the near-term growth prospects, the Sri Lankan economy is expected to rebound strongly in 2021, he said.

Sri Lanka sustained its growth momentum over the medium term, supported by the stimulus measures already in place and the effective implementation of the pro-growth policy proposals announced in the Government Budget 2021.

“The trade deficit has narrowed significantly, while the external current account deficit is expected to have improved thus far during the year,” Prof. Lakshman said. Gross official reserves were estimated at US$ 5.9 billion at end October 2020.

The Sri Lankan Rupee remains stable, and speculation driven pressure over the past few days was effectively addressed.

Inflation remained subdued in the near term, with a likely build-up of some pressure over the medium term as aggregate demand and economic growth recover towards potential levels.

Complementing the concessionary loans schemes proposed by the Government in Budget 2021, a maximum interest rate was introduced on mortgage-backed housing loans obtained by salaried employees from licensed banks.

The Monetary Board has urged all financial institutions to pass on the benefit of the low interest rate environment expeditiously to their borrowers, in respect of new as well as existing facilities.