Sri Lanka’s external finances under pressure, says Fitch

The consumption and investment boom following the end of a long civil war in 2009 lifted Sri Lanka’s economic growth to 8% yoy in 2011. However, a combination of domestic supply constraints, strong credit growth and high global oil prices also led to a substantial widening of the trade deficit to an estimated 17% of GDP in the 12 months to November 2011 from 10.5% of GDP at end-2010 (2008 peak was 15%).