IMF commends Lanka's growth rate

by L. S. A. Wedaarachchi

Sri Lanka is in good shape in economic and industrial development. The growth rate of 8.1 percent was achieved in the first quarter of 2006 as against 4.4 percent in the corresponding period last year. The IMF team which visited Sri Lanka recently commended Sri Lanka's achievements, said Governor of the Central Bank Ajith Nivard Cabraal.

He was addressing the 15th Annual General Meeting of the Industrial Association of Sri Lanka at the Galadari Hotel.

"Some people did not believe it. But this growth rate was achieved by hard work, dedication and the prudent strategies, implemented by the investors and the government. It was a collective effort. We should be determined and move forward," Cabraal said.

Industrial giants such as Samsung and Marubeni also commenced their business activities in a small way. We also work with dedication and a positive outlook to achieve our targets, he said.

Most of the industries were established in the Western Province - either in Colombo, Gampaha or in the Kalutara district. It is time we moved out of the Western Province and set up projects in the other provinces.

Of the 4,600 banking outlets, 3,500 were in the Western Province and there are only 1,100 in the provincial cities. It is vital to change this situation in all economic and social spheres for sustainable development, he said.

Industrial Association of Sri lanka Chairman Dr. Anura Ekanayaka said that the Sri Lanka economy expanded by an impressive 8.1 percent in real terms in the first quarter of 2006, over the relatively low growth of 4.4 percent in the corresponding quarter of 2005 according to a recent media release of the Central Bank.

"The contribution of the industry sector to the overall growth of GDP had declined from 45 percent in the first quarter of 2005 to 20 percent in the corresponding period this year.

The lower contribution to GDP growth could be seen in all sub sectors of the industry sector, particularly in the manufacturing sub sector due to the relatively low growth of the apparel industry, he said.

Explaining the performance of the industrial sector Ekanayaka said that this sector consists of mining and quarrying, manufacturing, construction and electricity and water.

These grew by 8.3 percent in 2005 compared to 5.2 percent in 2004.

"In the manufacturing sector the output of factories and industries which accounted for over 80 percent of manufacturing output, grew by 6.2 percent in 2005. The growth in the factory industry was broadbased across all industrial categories.

The main engines of growth were the industrial categories of textile, weaving, apparel and leather products, food beverages and tobacoo products, chemical, rubber and plastic products and non-metallic mineral products. The four industrial categories accounted for over 90 percent of growth in the industrial sector, he said.

The new office-bearers for the year 2006 -2007 of the Industrial Association of Sri Lanka were elected. Dr. Anura Ekanayaka was reelected chairman and Sanath Weerasooriya Secretary.