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From AFP (see full text here):
Sri Lanka's president Mahinda Rajapaksa began his second term vowing an economic miracle after decades of conflict, but the post-war boom is already fraying.
Sri Lankan economist and former central bank deputy governor W. A. Wijewardena believes the economy is in trouble despite an official 7.2 percent growth forecast for 2012.
He says the balance of payments problem will have a knock-on effect on Sri Lanka's ability to service its large commercially raised foreign debt, the value of the local currency and domestic prices.
The country needs to borrow heavily to finance the trade deficit and repay debt which could push the country into a vicious debt cycle, experts warn.
We've been pointing to the emergent crisis for some time. See our detailed analyses here:
Prices rise as Mahinda Economics unwinds (Feb 2012)
Mahinda Economics (Sep 2011)
Meanwhile, AFP's report adds:
The Centre for Policy Alternatives think-tank in Colombo says the government is likely to try to mask domestic economic problems with anti-Western rhetoric.
"The government has already organised anti-Western demonstrations to divert attention," said the think-tank's director Paikiasothy Saravanamuttu.
"But they won't be able to do it for long because people are feeling the pinch."
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