Poverty drops to 4%

There is a sharp reduction in poverty in the country which has dropped to around four percent, said Governor, Central Bank Ajith Nivard Cabraal addressing a budget seminar organised by BDO Partners on Thursday.

He said the poverty level in the country has plummeted to around 4.5 percent from around 15 percent in 2007 due to consistency of policy and sound macro economic principles.

"Political stability and continuity of policy are vital for economic growth in the country.

Singapore is a classic example of economic prosperity achieved through consistency of policy", Cabraal said.

Poverty had been high at regional level due to the concentration of wealth and development confined to the Western province. Regional development had been hampered severely due to the disparity in economic benefits.

Cabraal said the Western province accounted for around 52 percent of the growth in the country five years ago and this trend reversed last year as its contribution dropped to around 46 percent.

"The shift in policy and bold decisions taken by the government supported by the Central Bank helped bring about regional development", the Governor said.

"The country was able to reach a per capita income of US$ 1,000 after 56 years and from 2005-2010 the income doubled.

The country is poised to double the current per capita income by 2016", Cabraal said. The per capita income in the country had been low due to the protracted war that crippled development for decades. Sri Lanka is yet a middle income country.

Cabraal said the five hub concept will be a boon to development in the country. Development of knowledge based ports and aviation, business process outsourcing and information technology will take the country forward.

"The President presented a long term development budget which has provided a range of tax reliefs to sectors. Relaxing of exchange control, excess foreign reserves and increase in bank lending to private sector will be beneficial for the economy", Cabraal said.

- LF