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.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services