The Finance Ministry has revised its economic growth forecast for the fiscal year to 4.9%, down from the previously proposed 5.5%, as outlined in the budget presented to Parliament for this year.
The Ministry's recent macroeconomic update highlighted factors contributing to this downgrade, citing slower-than-expected performance in tourism and construction. These sectors, crucial to the country's economic framework, have encountered significant setbacks.
Tourism, traditionally a robust contributor to GDP, has been impacted by a sharp decline in arrivals from key markets, notably India. The report noted a reduction in both tourist numbers and their duration of stay in resorts, affecting sectoral revenues.
Similarly, the construction industry, vital for infrastructure development and employment, is expected to grow by a modest 0.7% this year. This slowdown is attributed to the government's reform measures, including the suspension of Public Sector Investment Programme (PSIP) projects aimed at recalibrating economic strategies.
Despite these challenges, there are positive signs in the economic landscape. Tourism revenues are projected to exceed last year's figures, contributing an estimated Rs 21.9 billion to GDP, marking a 6.1% increase from the previous year. This resilience within the sector suggests potential for recovery despite initial setbacks.
The Ministry's recent macroeconomic update highlighted factors contributing to this downgrade, citing slower-than-expected performance in tourism and construction. These sectors, crucial to the country's economic framework, have encountered significant setbacks.
Tourism, traditionally a robust contributor to GDP, has been impacted by a sharp decline in arrivals from key markets, notably India. The report noted a reduction in both tourist numbers and their duration of stay in resorts, affecting sectoral revenues.
Similarly, the construction industry, vital for infrastructure development and employment, is expected to grow by a modest 0.7% this year. This slowdown is attributed to the government's reform measures, including the suspension of Public Sector Investment Programme (PSIP) projects aimed at recalibrating economic strategies.
Despite these challenges, there are positive signs in the economic landscape. Tourism revenues are projected to exceed last year's figures, contributing an estimated Rs 21.9 billion to GDP, marking a 6.1% increase from the previous year. This resilience within the sector suggests potential for recovery despite initial setbacks.
