EXECUTIVE SUMMARY Context. Sri Lanka’s economy has navigated recent market turbulence relatively well. Growth has remained solid, inflation is in mid-single digits, and the current account deficit has narrowed. From mid-May, the exchange rate came under pressure as market expectations of...

EXECUTIVE SUMMARY Sri Lanka’s 2009 Stand-By Arrangement was initiated at the onset of the global financial crisis. It also coincided with the ending of the country’s decades-old civil conflict. This unusual combination of circumstances made the program subject to very high economic...

KEY ISSUES Context. Macroeconomic performance has generally exceeded expectations. Real GDP grew 7.3 percent for 2013, up from 6.3 percent in 2012. Inflation declined to below 5 percent, and the external current account balance has improved. Private credit growth has been slow, however, a number...

EXECUTIVE SUMMARY The first chapter on monetary policy transmission examines the channels through which innovations to policy variables—policy rate or monetary aggregates—affect such macroeconomic variables as output and inflation in Sri Lanka. The effectiveness of monetary policy...

In this paper we examine the channels through which innovations to policy variables— policy rates or monetary aggregates—affect such macroeconomic variables as output and inflation in Sri Lanka. The effectiveness of monetary policy instruments is judged through the prism of...

In this paper we present various techniques to estimate Sri Lanka’s potential output and output gap, including statistical and model-based approaches. Compared to conventional statistical filters that rely exclusively on information in a single series, the model-based approaches allow...

This paper examines the Progress Report for Albania’s National Strategy for Socio-Economic Development (NSSED). 2002 was the first year of implementing the NSSED. The implementation process has been oriented toward achieving the annual objectives and in accordance with the program of...

The paper reports the progress of the Honduran poverty reduction strategy program, projects, and policy measures. The report provides details on the organization and results of the consultation process, and analyzes the macroeconomic framework for the poverty reduction strategy. An overview of...

Gasoline and diesel fuel are heavily taxed in many developed and some emerging and developing countries. Outside of the United States and Europe, however, there has been little attempt to quantify the external costs of vehicle use, so policymakers lack guidance on whether prevailing tax rates...

Bhutan has evolved from a closed economy to a trading nation that exhibits a high degree of dependence on trade. Exports have grown rapidly but overall the country’s trade deficit continues to widen owing to an even faster growth in the value of imports. The manufacturing and industry...