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Wednesday, 14 March 2012 - 12:37
Economic growth downgraded to 7% from 8%
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Sri Lanka's economic growth for 2012 has been downgraded to 7% from an earlier projected 8%, but inflationary pressures may remain weak, the Central Bank said, amid measures to counter a balance of payments crisis.

The central bank raised policy rates in February, allowed a rupee peg to break in February after it lost more than a quarter of its foreign reserves, amid strong credit growth.

The state also raised energy prices, which will reduce future unproductive credit to state-run energy enterprises.

The Central Bank asked banks to limit credit growth to 18 percent in 2012 from over 34%in 2011.

It added that slower credit growth, higher energy prices, and lower imports, will reduce economic activity this year.

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