reports
Frontier Inflation Review - February 2017
​Headline inflation reaches an all-time high of 6.8% YOY under the new base YOY inflation climbs to a high of 6.8% from 5.5% growth in the previous month, largely led by base effects, while F&B inflation also added further upward pressure. Core inflation continues to edge up, rising from an all-time high of 7.0% YOY in the previous month to 7.1% in February.
Frontier Inflation Preview - February 2017
​Inflation to accelerate to 6.5% YOY on base effects YOY inflation to rise to 6.5% from 5.5% in the previous month due to base effects; marginal growth of 0.3% MOM expected. F&B inflation expected to slowdown compared to the rise seen in preceding months; Non-Food not expected to see major movements based on market information available
Frontier Economic Monthly - February 2017
​Key Takeaways -Foreign investors continue to sell out of government securities. However, a reversal in investor sentiment toward emerging market investments in general and the credit outlook upgrade by Fitch could see a reversal of these outflows. -The planned sovereign bond issue and the syndicated loan could help shore up foreign reserves and improve external finances. -LKR will likely be under pressure until foreign outflows recede and/or foreign funds are raised. However, overall dep...
Frontier Inflation Preview - January 2017
​Drought conditions and base effects to drive up headline inflation to 5% levels in January Prolonged drought conditions to drive up F&B inflation, similar to previous month; Non Food inflation to see downward pressure from Kerosene price revision Headline inflation expected to rise 0.7% MOM; YOY to rise to 5% from 4.1% in the previous month, driven by both F&B growth and base effects.
Frontier Economic Monthly - January 2017
​Key Takeaways -CBSL Road Map for 2017 highlights the need for a more flexible LKR which will likely see less intervention in the currency market; expect more volatility in the LKR and a bit more depreciatory pressure during the year as a result of this move -However, pressure on rates and LKR will be less in the near term given the USD 458mn SLDB issue which will likely take pressure off debt repayments in the next few months -CBSL expects to base its monetary policy decisions on achievi...
Frontier Inflation Advantage Report - December 2016
YOY growth accelerated to 4.1% from 3.4% growth in the previous month, while rising by 1.0% over the month in December. ​Notable growth in F&B inflation due to drought conditions affecting cultivation activities is a key reason for the overall growth in headline inflation
Frontier Inflation Pre Data Report - December 2016
​Headline inflation expected to edge up to 3.7% YOY in December Headline inflation expected to grow 0.6% MOM, while increasing to 3.7% on a YOY basis from 3.4% in the previous month Poor cultivation in the Maha season due to drought expected to lead an uptick in F&B inflation; Non-Food category to see pass through effects of tax revisions in November
Frontier Economic Monthly - December 2016
​Executive Summary -The IMF’s detailed report following its first review of the 3-year EFF program reiterates the need for proper implementation of fiscal and structural reforms while noting no further monetary tightening is currently required. -The proposed reduction in the use of foreign currency swaps and reliance on outright dollar purchases to build foreign reserves may exert short term pressures on the LKR. However, the reduction in the reserves target for the year by the IMF will li...
Frontier Inflation Advantage - November 2016
YOY inflation slowed to 3.4% from 4.2% in the previous month, despite increase of 0.6% over the month. Notable growth in Non-Food inflation due to tax revisions leads MOM growth in overall inflation, however the increase was limited by the flat growth in F&B category
Frontier Inflation Pre-data - November 2016
​Inflation to edge up further driven by increases in both Food and Non-food categories Headline inflation expected to rise 1.6% MOM in November; growing to 4.4% YOY from 4.2% in the previous month. Re-implementation of revisions to VAT and NBT to drive growth in Non-Food inflation; while poor supplies in certain food categories expected to contribute to rise in F&B inflation.
Frontier Economic Monthly -November 2016
​Executive Summary -Reiterating our updated end-2017 views on rates and LKR; a decline in interest rates and possibility of a further limited depreciation in the LKR (against the USD) by the end of 2017. -However, a key message is to remain vigilant given the possibility of black-swan type risks the external environment could bring next year following the drastic changes in the US political trajectory under a Trump presidency. -The IMF wraps up its second review on the EFF program, commends...
Frontier Economic Monthly - October 2016
​Executive Summary​-CBSL’s focus on growth may be an indication that there could be no more rate hikes in the current cycle. The stance is supportive of our end-2017 base view - where we expect to see a decline in interest rates and a largely stable LKR with a bit more room for further depreciation - where a key assumption is that there will be no more monetary tightening by the CBSL.-The IMF’s first review on the EFF program commends monetary tightening measures taken, but highlights th...
Frontier Economic Quarterly -October 2016
IMF commended the CBSL's efforts to further monetary tightening as it raised policy rates for the second time this year in July as credit growth showed no signs of slowing down; however IMF stressed the need key fiscal reforms, particularly with regards to VAT. Brexit and its resultant volatility has created a favorable environment for emerging markets as yield-seeking investors turn their focus to riskier assets; increased foreign inflows into local government securities has allowed CBSL to r...
Frontier Inflation Advantage - September 2016
Headline inflation eased further to 3.9% YOY growth from 4.0%; declining 0.3% over the month Continued decline in F&B category of 0.7% MOM led overall moderation in inflation Inflation Review Headline inflation eased further in September, recording 3.9% YOY growth from 4.0% growth seen in August. On a MOM basis, it reported a decline of 0.3%. This was largely on the back of falling food prices which saw the Food & Beverage(F&B) category record a 0.7% monthly decline. This was below our est...
Frontier Inflation Pre-Data - September 2016
​Headline inflation to remain steady at 4% levels in September Marginal decline of 0.1% expected over the month owing to our expectation of a slight decline in the F&B category YOY inflation to grow by 4.1% from 4.0% in AugustIn our Report Last month, the Food & Beverage category recorded its highest monthly decline as almost all major food categories, except for fruits, saw notable declines in prices due to high supplies from the Yala harvesting season. Price data released by the Department...
Frontier Economic Monthly - September 2016
​Executive Summary -Our preliminary end-2017 view sees a decline in interest rates and a largely stable LKR (against the USD) with just a bit more room for further depreciation by the end of 2017. -Key assumption of the view is an improvement in fiscal situation next year particularly given the IMF presence. -Overall, our initial outlook for 2017 is one of relative stability compared to shock adjustments we have seen in recent years. -However, we expect to reassess these views once the Budget ...
Construction powers Growth in Credit to Sri Lanka's Private sector
​Executive SummaryConstruction related credit has been growing steadily reaching multi-year high growth rates in recent months, becoming a key driver of private sector credit growthThe strong performance is apparent in other construction-related indicators as well, such as imports of building material and housing approvalsHowever, overall investments in construction activities still remain below 2013 levels which was the highest seen in the past 6 yearsIn Our ReportConstruction driving credit ...
Post Data for Inflation in August 2016
​Headline inflation falls to 4.3% from 5.5% growth in July; 1.7% MOM declineF&B inflation sees sharpest monthly decline since start of the index, down 3.7% due to high supplies from peak Yala harvesting season.Inflation ReviewHeadline inflation recorded its sharpest monthly decline since February 2015, contracting by 1.7% MOM in August 2016. On a YOY basis, inflation slowed to 4.3% from 5.5% growth seen in July. The decline was led by a greater-than-expected drop in F&B prices, which recorded ...
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