Economic growth in Sri Lanka fell to 4.8 per cent in 2015 from 4.9 per cent in the previous year, with the slowdown attributed to a slowing export sector and foreigners taking away their funds from Sri Lanka owing to a stronger US economy, according to the Central Bank’s annual report for 2015 released on Tuesday.

“The impact of these developments was offset to some extent by lower international commodity prices,” the 2015 annual report said, according to The Sunday TImes.

Year-on-year headline inflation by end 2015 was recorded at 2.8 per cent, compared to 2.1 per cent at the end of 2014, the report further said.

Core inflation, which switches out energy and selected food items from the CCPI basket, grew from 0.8 per cent, on a year-on-year basis in February 2015, to reach 4.5 per cent at the end of the year. This was driven primarily by the enhanced growth of bank credit as well as higher wages afforded to government workers and employees in other sectors of the economy, the report noted.

“Meanwhile, despite substantial gains from the lower oil prices and continued positive trends in the tourism sector, slowing down of net foreign exchange inflows, including worker remittances, and capital outflows, generated an overall deficit in the balance of payments (BOP). Efforts to reverse the downward trend in government tax and non-tax revenues were moderately successful, but overruns on the expenditure side of the government budget meant that the budget deficit grew to 7.4 per cent of Gross Domestic Product (GDP), as against the targeted deficit of 4.4 per cent,” it said.