'Sri Lanka targets GDP of US$ 150 billion by 2020'

by Shirajiv Sirimane

“Maintaining high growth and at the same time to have low inflation was a dream of any government, and Sri Lanka in the past four years have achieved this. This is the first time in Sri Lankan history since independence, that the country has achieved this,” Governor of the Central Bank, Ajith Nivard Cabraal said.

Speaking at the Capital Market Conference held at the Cinnamon Lakeside, he said that this was due to the leadership and guidance offered by President Mahinda Rajapaksa, who is also the Minister of Finance. He said that this positive sentiment would be maintained in the future too and the per capita income too would maintain its upward trend allowing the people to reap the benefits of the development. “It took South Korea nearly 40 years after their war to increase their per capita income to around US$ 7,000 where as Sri Lanka targets to reach that milestone by 2020, 11 years after its 30 year conflict.”

Outlining the plans for 2020 he said that Sri Lanka targets a GDP that would be around US$ 150 billion, and a US$ 7,000+ per capita income.

Towards these goals Sri Lankan Economic growth would be averaging around 8% from 2015 and Inflation would be further maintained at the lower end of mid-single digits. “Poverty would be at very low levels, with abject poverty having been eradicated.”

Unemployment is to be limited to standard unemployment levels while a debt to GDP level be around 50 percent.

The Sri Lankan rupee that has appreciated gently over the years, from 2015 to 2020 would keep moving in the same direction.

Sri Lanka by 2020 targets the realisation of several challenging National Mileposts and Targets -

[National Mileposts]

*Poverty: Less than 1% * Unemployment: Less than 3% * Acute Malnutrition amongst children under 5 years: Less than 3% * Electricity coverage: 100% * Literacy: 100% * Computer Literacy: 90% * Life Expectancy: Above 80 yrs. for both male and female * New Highways: Additional 311 km * Mono rails: To be initiated in 2015 * Entire road network: All weather roads with 100% rural accessibility * Public investment: 8% of GDP * National Savings/investment gap: 0.5% of GDP *Market based Targets Value * Stock Market Capitalisation: US$ 150 billion * Corporate bond market: US$ 30 billion * Bank assets: Rs. 18 trillion

The 2020 targets would obviously be challenging, he said and many stiff hurdles would need to be surmounted, and political stability would be key towards maintaining this. “The positive political environment since 2006 helped to effectively steer the economy out of global crises and turbulent times in the recent past.

“The implementation of progressive economic policies would require political support at times of change and policy consistency is needed to convince investors that they could commit themselves to long-term large-scale investments, without ad-hoc adverse changes.”

He said that continuing the country-wide infrastructure development projects would provide the necessary impetus for investments which is another must towards achieving the 2020 targets.

“Significant improvements to the macro economy are under way through infrastructure development and rapid advancement in physical infrastructure would further support the growth momentum in the medium term.

“New growth sectors are to be based around newly developed transport, port, aviation and commercial hubs giving more employment opportunities to youth.”

Sri Lanka has already shown that it is an excellent case study of a transition from terrorism to peace and development and the targets set for 2020 is certainly on the cards taking the country to become the Wonder of Asia.

“This would help Sri Lanka to raise its sights towards 2040 where Sri Lanka could move towards the “High Income” category with confidence,” he said.