|
|
 |
| Sunday, 5 May 2002 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
GDP growth could improve measurably this year - ESCAP survey Sri Lanka should ensure that there is macro-economic stability in the country as it is a critical factor to attract investors, said Institute of Policy Studies Economist Dr. Dushni Weerakoon, introducing the ESCAP Survey 2002. The Economic and Social Survey of Asia and the Pacific 2002, a publication by the United Nations Economic Commission for Asia and Pacific (ESCAP), was launched in Colombo at the United Nations head office last week. "If cessation of hostilities holds, there will be an improvement in investment as well as tourism," she added. Dr Weerakoon described last year as the most severely contracted year for Sri Lanka, which recorded a GDP growth rate of 1.4 per cent due to a slowdown in the world economy, the attack on the Bandaranaike International Airport, poor power supply and political instability. The budget is investor-friendly and attempts to achieve economic stability, but any policy reforms will have to take account of improving the rural economy, she noted. Economic activity is not at its fullest, but has improved during the last few months. She cautioned that there will be problems if inflation increases since the country is carrying over some of the problems of 2001. "Slowing world economy, lower prices for energy products, the terrorist attack on the US, severe capital outflows, poorer agricultural production and civil unrest are some of the main reasons for the negative growth rates experienced last year. The net result was an economic downturn, particularly sharp in Turkey, and to a lesser extent in Sri Lanka, last year. The slowdown was modest in Iran and Pakistan, said the ESCAP Survey 2001. Inflation was another major concern and the rate of increase was at double digit levels in Sri Lanka. Currency depreciation was around 18-20 per cent in the country. India, Iran and Sri Lanka experienced a comparatively large decline or contraction in export earnings , which could be attributed to a less auspicious exogenous environment among other factors. The report states: "Sri Lanka, Turkey and Pakistan did not perform well in 2001. Therefore the GDP growth rate could be expected to improve measurably in 2002." Economic performance deteriorated more sharply in Sri Lanka and Turkey. The former achieved a substantial gain of 6 per cent in GDP in 2000, but the growth rate was around 1% the following year. It is attributed to several internal and external factors such as the sharp decline in export demand and earnings, weak agricultural production, renewed civil unrest and the associated loss of consumer and investor confidence. Export receipts contracted in Iran by over 17 per cent and in Sri Lanka by five per cent. Garment exports which accounted for about half of the merchandise trade earnings fell by over one per cent to US$ 815 million last year, states the survey. The persistence of relatively large budget deficits is also noted by the survey as a major policy issue in the region. |
|
News | Business | Features
| Editorial | Security Produced by Lake House |
