...Favourable Demand Environment: Fitch Ratings expects the conducive demand environment for consumer durables to persist in Sri Lanka, despite possible headwinds from a depreciation in the Sri Lankan rupee against major currencies and higher import tariffs. Improved purchasing power, which spurred revenue growth into the high-teens for top consumer durable retailers in 1H15, ought to be sustained by lower energy tariffs, low interest rates, public sector salary hikes and price cuts on essential food items introduced by the new government in early 2015. HP-Led Growth Continues: Fitch believes in-house hire purchase (HP) programmes offered by top retailers, which contribute about 40% of sector revenues, will continue to drive top-line growth. HP financing, which is sensitive to interest rate movements, improves the affordability of durable goods especially among rural households, which accounts for about 75% of the population. Fitch does not expect interest rates to climb to the mid-to-high-teen...
