‘Lanka’s growth rate commendable’

By Lalin Fernandopulle

There is a lot more for Sri Lanka to do, if it is to achieve a better economic growth rate, IMF Resident Mission Head, Dr. Koshy Mathai said at the Golbal Commerce Excellence Awards.

He said that Sri Lanka's Foreign Direct Investments are yet low, at around one percent of the GDP when it could be around five to six percent of the GDP as Vietnam.

“‘Sri Lanka's economy has managed to grow by around five to six percent annually which is a commendable growth rate and credit should go to companies which have placed faith in the fundamentals of the economy,” Dr. Mathai said. He also commended the improvement in Sri Lanka's ease of doing business ranking which would help attract foreign companies to the country.

“Today it is easy for foreign companies to come to Sri Lanka and do business due to the conducive environment in the country. We should not rest on these laurels. Instead work hard to accelerate economic growth and be ahead of other countries,” the IMF mission chief said.

Sri Lanka’s ease of doing business index improved from 102 a couple of years ago to 80 this year. Economic analysts said that bureaucracy and public sector lethargy are impediments to boost foreign investments and lure companies to set up operation in Sri Lanka.

Dr. Mathai said that Sri Lanka must continue to improve the business climate. Macro-economic stability is vital for economic growth. Businesses cannot grow if inflation and exchange rates are high.

“Last year there were disruptions to macro-economic growth. This year Sri Lanka has managed it with a flexible approach which is vital for macro economic stability. This is not enough.

The quality of the labour force, IT and English skills and vocational training should be improved. The fiscal infrastructure must improve with the support of the private sector,” he said.The IMF mission has noted the declining trend in exports which would have a negative impact on economic growth.

“The export ratio has declined since the 1990s. Exports as a share of the GDP has declined. This trend has to change. Only one percent of exports go to China and five percent to India. We should market Sri Lanka more,” Dr. Mathai said.

The Global Commerce Excellence Awards is organised by the Airport Aviation Services, Board of Investment, Sri Lanka Ports Authority and the Shippers’ Academy of Colombo.