Per capita income will hit $ 5,000 with sustained growth rate - CB Governor

The Government is targeting a GDP growth of over 8 percent next year and if that growth rate could be sustained over the next 20 years the per capita income will hit US$ 5,000, said Central Bank Governor Ajith Nivard Cabraal.

The Governor was addressing the launch of the Sri Lanka Germany Business Council website on Thursday.

Speaking on 'Positioning Sri Lanka for the Future', he said the country's current per capita income which is around US $ 1,355 is higher than many countries in the region.

"With a per capita income below US $ 800 in the provinces the Government has undertaken major projects to bridge the regional disparity under the Mahinda Chintana's 10-year development program", Cabraal said.

The intense war for over three decades in the country has had an adverse impact on the growth in the Northern and Eastern provinces and today a majority of the rural masses live below the poverty line.

He said for the first time in history the country had three running years of 6 percent GDP growth rate. The GDP growth rate achieved so far this year is over 6 percent. "Everything is not bad in the country as some are trying to project a totally negative picture.

People will migrate as it is happening in other countries but development will continue and the Government will make use of the resources available", the Governor said.

When asked about what measures the Central Bank is taking to curb rising inflation, he said inflation has been a major issue in the country which rose over 20 percent this year.

"The Central Bank has introduced tight physical and monetary policies to curb inflation and we are optimistic that the inflation rate will drop to a single digit next year", Cabraal said.

He also said the unemployment rate has been brought down by 2 percent but what is required are better working ethics where people are prepared to work hard for the country.

Sri Lanka's annual import bill runs into billions whereas the quantity exported is yet unsatisfactory. The country's annual import bill is over US $ 10 billion whereas export earnings are US$ 7.6 billion.

Foreign remittances this year are around US$ 2.8 billion which is a result of the hard work of migrants who work 10-12 hours per day.

The Governor said the Government incurs massive losses due to subsidies. The oil bill this year is over US$ 2.4 billion while four years ago it was US$ 7.8 million.

Agriculture is a vital component that needs to be developed as today people have to pay double the price for milk and rice compared to last year. Agriculture alone cannot drive development, industries too need to be developed.

Animal husbandry, fisheries and tourism are potential industries that can bring revenue to the country, he said.