Sequel to huge inflow of foreign investments:

N-E economic growth to be expedited

by Lalin FERNANDOPULLE

Economic growth in the North and the East will be expedited this year following the huge inflow of foreign investments to the country, said Governor Central Bank, Ajith Nivard Cabraal.

He said around US$ 3 billion has been invested on development in the North and the East and added that around US$ 2 billion has been already invested to accelerate development in the East.

"Major investments are being made on reviving the banking sector, IT, agriculture, fisheries, palmyra and the Small and Medium Enterprises in the North and the East", Cabraal said.

"There is a marked progress in road development, transportation, healthcare, education and livelihood development in the North", he said.

The Central Bank hopes to maintain inflation at mid-single digit level in the short and medium-term this year. Inflation was brought down to a single digit last year from 23 percent in 2008.

Cabraal said maintaining inflation at mid-single digit would be a challenging task for the bank.

The Central Bank is confident that the Per Capita Income in the country will double by 2016 from the current US$ 2,000. Per Capita Income has been less than US$ 1,000 for several years.

Sri Lanka was raised to the state of a middle income country last year, enhancing the image of the island and boosting the confidence of investors.

The Central Bank projected a vibrant growth and fast post-war economic revival this year in its Road Map for 2011 launched on Tuesday.

Cabraal said he was confident that the country would reap the benefits of post-war peace and achieve a GDP growth rate of 8.5 percent this year followed by nine percent in 2012.

Senior Lecturer, Department of Economics, University of Colombo. Dr. Sirimal Abeyratne said that Sri Lanka would achieve an economic growth rate of around seven to eight percent this year given the ground conditions such as the revival of the North and East economy, growth in agriculture, tourism, construction and fisheries sectors, reconstruction and rehabilitation, increase of capacity utilisation and the recovery of the global economy.