COLOMBO: Sri Lanka’s falling external deficits should allow the central bank to review its tight monetary and credit policies toward the end of the year, Governor Ajith Nivard Cabraal said.
The central bank has raised key policy rates twice since February, allowed a flexible exchange rate, and told banks to limit credit growth in order to tame the worryingly high deficits.
While the deficits were coming down, Cabraal said the central bank needed a little longer to see the results of its strategy before deciding whether to relax the tight policies in order to put back momentum in the economy.
He expected to be able to take a clearer view toward the end of the year.
“By that time we will be in a better position to understand ... the new equilibrium we are looking at,” he said.
“So based on that equilibrium we can turn on the engine.”
The bank has held rates steady since April, while economic growth slumped to a 2 1/2 year low in the April-June quarter. For now, Cabraal said, the bank could leave policy unchanged.
“It is very clearly seen with the trade deficit coming down, balance-of-payments moving into the black... that we don’t need to make any further adjustments as far as interest rates are concerned,” he said.
“So it’s not a question of easing it or tightening it any further.”
Sri Lanka posted a record $ 9.7 billion trade deficit and a $ 4.6 billion current account deficit in 2011, as a combination of a heavily defended rupee and a credit boom fueled by low interest rates led to soaring imports of consumer and capital goods.
Since November, mainly due to the flexible exchange rate policy, the rupee has depreciated by more than 16 percent, driving up the cost of imports.
Turning to foreign direct investment, Cabraal warned that the government may have to revise down its $ 2 billion target for this year due to companies delaying investments already approved by the government.
Sri Lanka needs tight monetary policy little longer
Sri Lanka needs tight monetary policy little longer
Industry leaders highlight Riyadh’s Metro and infrastructure as investment catalysts
RIYADH: Saudi Arabia’s capital, Riyadh, is experiencing a transformative phase in its real estate sector, with the construction market projected to reach approximately $100 billion in 2025, accompanied by an anticipated annual growth rate of 5.4 percent through 2029.
The Kingdom is simultaneously advancing its data center capacity at an accelerated pace, with an impressive 2.7 GW currently in the pipeline. This expansion underscores the critical role of strategic land and power planning in establishing national infrastructure as a cornerstone of economic growth.
These insights were shared by leading industry experts during JLL’s recent client event in Riyadh, which focused on the city’s macroeconomic landscape and emerging trends across office, residential, retail, hospitality, and pioneering sectors, including AI infrastructure and Transit-Oriented Development.
Saud Al-Sulaimani, Country Lead and Head of Capital Markets at JLL Saudi Arabia, commented: “Riyadh is positioned at the forefront of Saudi Arabia’s Vision 2030, offering unparalleled opportunities for both investors and developers. National priorities are continuously recalibrated to ensure strategic alignment of projects and foster deeper collaboration with the private sector.”
He added: “Recent regulatory developments, including the introduction of the White Land Tax and the rent freeze, are designed to stabilize the market and are expected to drive renewed focus on delivering premium-quality assets. This dynamic environment, coupled with evolving construction cost considerations in select segments, is fundamentally reshaping the market landscape while accelerating progress toward our national objectives.”
The event further underscored the transformative impact of infrastructure initiatives. Mireille Azzam Vidjen, Head of Consulting for the Middle East and Africa at JLL, highlighted Riyadh’s transit revolution. She detailed the Riyadh Metro, a $22.5 billion investment encompassing 176 kilometers, six lines, and 84 stations, providing extensive geographic coverage, with a depth of 9.8 km per 100 sq. km. This strategic development generates significant TOD opportunities, with properties in proximity potentially commanding a 20-30 percent premium. JLL emphasized the importance of implementing climate-responsive last-mile solutions to enhance mobility and accessibility, particularly given Riyadh’s extreme temperatures.
Gaurav Mathur, Head of Data Centers at JLL, emphasized the rapid expansion of the Kingdom’s AI infrastructure, signaling a critical area for technological investment and innovation.
Focusing on the construction sector, Maroun Deeb, Head of Projects and Development Services, KSA at JLL, explained that the industry is actively navigating complexities such as skilled labor availability, material costs, and supply chain dynamics.
He highlighted the adoption of Building Information Modeling as a key driver for enhancing operational efficiency and project delivery.
