Stage set for a $ 100 b economy - CB Governor

By Sanjeevi Jayasuriya

The economic landscape of Sri Lanka will be repositioned to accommodate the $ 100 b GDP and $ 4,000 per capita income targets.

The policy measures to ensure sustainable economic growth has been perfected to a greater extent and the country has experienced an excellent three years, with plenty of opportunities, Central Bank Governor Ajit Nivaard Cabraal said at the launch of Road Map 2013 – monetary and financial sector policies for 2013, in Colombo last week.

The country is moving towards stable macro-economic fundamentals. We project 6.5 percent economic growth for this year to be driven mainly by service sector growth, he said.

This was the seventh consecutive year that the Central Bank presented its policy direction and work plan for the upcoming period.

“We are committed to a low inflation regime and the country has recorded single digit inflation for the past 47 months which is the longest period so far.

Structural changes of the economy are taking place with more focus on service sector contribution,” he said.

With strong macro-fundamentals and the rupee at a stable level, poverty alleviation measures will be further implemented.

The provincial share of the Western Province declined sharply to 44.4 percent. Other provinces have begun to show more activity.

The target poverty level for 2016 will be less than two percent and many initiatives are taking place to achieve the target.

While highlighting the areas of focus, the Governor said that much work has to be done to improve productivity.Sri Lanka has a huge space for productivity improvement and will look for a multi-dimensional approach.

Major structural changes will be implemented to overcome the middle income trap and five hubs and the tourism sector will be promoted to glide past this situation.The country is in the process of reaching sustainable fiscal consolidation where serious commitment is shown.

The stage is set for a $ 100 b economy and $ 4,000 per capita income. Sri Lanka could achieve the desired results within a risk-based regulatory regime, he said.