Second only to China:

Sri Lanka ranked eighth fastest growing economy - EIU

by Shirajiv SIRIMANE

Sri Lanka received major world recognition when it was ranked as the eighth fastest growing economy in the world by the Economist Intelligence Unit (EIU) of the United States.

The EIU said that Sri Lanka’s economic growth would be second only to China.

The report states that the global economy would recover from the recession. It is envisaged that Sri Lanka would record a 6.3 percent GDP growth rate that is second only to China, which will record 8.6 percent in the Asian region.

This is the second honour Sri Lanka received recently. Early this month Sri Lanka was elevated to a Middle Income Emerging Market status country by the International Monetary Fund (IMF). Central Bank Governor, Ajith Nivard Cabraal said that Sri Lanka’s economy grew by over 6 percent during the 2006-2008 period.

“This is a commendable achievement given the fact that many countries recorded a negative or very low economic growth in 2009.

There are signs that our economy is gradually recovering from the impact that we had due to the global recession. This year is very promising as we are now on a completely different platform with the end of the nearly three-decade long conflict,” he told the Sunday Observer.

Economic analysts said that the two rankings clearly proves that the economy has grown by leaps and bounds in the past few years.

The end of the war, sound economic management and political stability have contributed for Sri Lanka to achieve this landmark accolade.

“The world’s economy will recover from recession and the post crisis economic landscape. This will pave the way to achieve a higher growth of about seven to nine percent in the medium term,” according to a spokesman for the Ministry of Finance and Planning, quoting the EIU report.

It is estimated that oil prices will average around US $ 74-80 per barrel for the period 2010-2012. Sri Lanka’s stock market has been ranked the second-best in the world.

With these positive signs coupled with political stability and higher inflow of capital it will be a leap forward in the sphere of economic prosperity. However, the challenges of maintaining price stability and rehabilitation of the Northern and Eastern provinces are ahead.

Sri Lanka also recorded over $850 million in Foreign Direct Investments (FDIs) last year, which is an all-time record.

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper.

As the world’s leading provider of country intelligence, the Economist Intelligence Unit helps executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.