The Unassuming Economist

From the IMF’s latest report on Sri Lanka:

• “Credit growth decelerated gradually to 14.7 percent (y/y) in December 2017 from its 28.5 percent peak in July 2016. However, credit to construction continued to grow rapidly at around 22.5 percent in 2017, reflecting buoyant real estate markets for both personal and commercial properties. Land prices in Colombo appreciated by 10.4 percent (y/y) in December 2017. Real lending rates stood at above 5 percent for most of 2017 but increased to about 7 percent in February 2018 with the deceleration in inflation. “

• “The authorities viewed the financial system as well-capitalized and stable. They did not see systemic risks arising from credit to the construction sector but agreed on the need to remain vigilant, especially in high segments of the real estate market. “