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| Saturday, 1 May 2004 |
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Economic prospects promising - Central Bank The Central Bank says that the country's future economic prospects appear to be promising provided that policy challenges are met effectively creating an environment for sustainable high quality economic growth. In its Annual Report for 2003, the CB says the progressive improvement of the GDP growth from 4 per cent in 2002 to 5.9 per cent 2003 was achieved through a continuation of the ceasefire and sound macroeconomic management. It notes that a continuation of sound macroeconomic management centred around the medium-term fiscal sustainable strategy has to be supported by effective implementation of economic reforms and development of infrastructure facilities particularly power and transport ,improvement in law and order strengthening political stability , effective utilisation of foreign donor assistance and harnessing the favourable external environment for the benefit of the country. It says that Money supply grew by 15.3 per cent in line with the monetary programme aimed at containing inflationary pressures , while supporting the economic recovery. According to the CB report the lower public sector credit utilisation enabled the accommodation of the expanding private sector credit demand without creating additional inflationary pressure. The domestic money market remained liquid and the yield curve shifted downward, although some lending rates declined relatively slowly. The Central Bank however states the continuation of a high spread between lending and deposit rates and comparatively high ratio of non-performing assets, even though the ratio has declined recently , underlines the necessity of accelerating financial sector reforms ,increasing competition in the financial markets and expanding inflation available to the public. The performance of the stock market showed a record improvement reflecting increased cooperate sector profitability and improved business confidence. |
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