Country on strong growth with single digit inflation

The country has recorded strong growth, mid and single digit inflation, with foreign reserves at a comfortable level and a steady Banking and Finance Sector with Sovereign Credit Ratings, Doing Business Index, and FDI, on the rise said Governor of the Central Bank Ajith Nivard Cabraal at the AmCham Luncheon meeting on Wednesday. The theme of the meeting was

“The future trends of the Sri Lankan economy and what it has to offer the private sector”. Cabraal said that fiscal deficit had been brought down to a manageable level and it was projected that the per capita income would reach the $ 3,000 mark by end 2012, whereas it had taken Sri Lanka 56 years to reach the $ 1,000 mark.

He further said that Sri Lanka’s growth rate that has stood at 8 percent for the past two years, may be consciously cut to 7.2 percent this year. Unemployment had reached its lowest levels in 2011.“Sri Lanka had to steer through some very turbulent times but the Government had been successful in a 'making a smooth landing without any damages', the Governor said.

The continuous upgrading of the countrywide infrastructure such as road development, port development, power projects, tourism-based projects and airports would benefit the private sector in Sri Lanka to expand and develop their activities. Special focus was being given by the Government for poverty reduction and projects such as “Gama Neguma” “Divi Neguma” “Maga Neguma” and “Kirigammana” were being implemented in 144 villages at Rs. 1m each. The total cost of the present work in progress was in the region of $ 7b.

Risk indicators of public debt had improved, while global risk has been rising while foreign reserves accumulation has been substantial in the past few years and the views of IMF, Rating Agencies and International Banks have been encouraging. The Governor said that the Government was very keen in private sector participation and that whatever development work already carried out by the Government will have links to provide a great potential to the private sector.