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| Sunday, 28 September 2003 |
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More time needed to maximise progress - Choksy Sri Lanka is making a determined effort to establish permanent peace within its borders, improve its resources and achieve economic independence, but we foresee the need for more time to maximise our progress, Minister of Finance K.N. Choksy told the International Monetary Fund and World Bank Annual Meeting on September 24 in Dubai. "It is encouraging that this year's meeting was held in a conducive environment where existing uncertainties such as the outlook for the global economy have now considerably dissipated, and the world economy is showing signs of recovery. "This ray of hope for a recovery of growth has been a result of reduced geo-political tensions, among other factors. Support from the Bretton Woods institutions for economic adjustments and reforms by countries who are making genuine efforts to promote growth and reduce poverty through market-friendly and pro-poor policies needs to be enhanced," he said. "Last year, Sri Lanka substantially met its budgetary goals. The preceding year's negative growth of 1.5 per cent was turned into a positive growth of four per cent in 2002. The budget deficit was reduced from 10.8 per cent in 2001 to 8.9 per cent in 2002. Inflation was brought down from 14.2 per cent to nine per cent. "For this year, the Asian Development Bank has forecast an average growth of six per cent for South Asia. Sri Lanka has set its target for an average growth rate of 5.5 per cent. Our currency has remained stable over the last 18 months. Cumulative exports have grown by 18 per cent in US dollar terms in the first half of this year. The output of major agricultural products, particularly rice, reached a new peak. Foreign Direct Investment inflows increased by 300 per cent over 2001, the third highest in South Asia during the past 12 months," the Minister said. The State has reduced its liability to the banking sector, making more money available for productive private sector development. The Central Bank's interest rates have declined, resulting in commercial banks reducing their lending rates. The Government has been able to reduce its direct corporate taxation, resulting in industrial activity expanding by seven per cent. The Government has concentrated on the recurring question of improvement of aid utilisation. Utilisation during the first eight months of this year increased by 76 per cent over the same period of last year, he said. |
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