Governor presents the Central Bank Strategic Plan
2010-2014:
National Savings reach 23.9 percent
Support to increase investments:
Charumini DE SILVA
Maintaining a proper infrastructure development throughout the
country and reducing the poverty of our people will be very challenging
yet possible with public and private sector support, Economic
Development Minister, Basil Rajapaksa said.
He was speaking on a visit to the Central Bank yesterday.
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Economic Development
Minister Basil Rajapaksa speaking to Central Bank staff
while the Central Bank Governor Ajith Nivard Cabraal
looks on. The Governor also presented the Central Bank
Strategic Plan 2010-2014 to Minister Rajapaksa.Picture
by Sudath Nishantha |
“Achieving the per capita income of US$ 4,000 will be possible with
the viable economic environment in the country. The country recorded a
positive economic growth amidst many challenges during the last two
years,” he said.
The Central Bank of Sri Lanka managed the country’s banking and the
financial sector in a firm manner where none of the banks collapsed due
to the impact of the global financial downturn.
“I hope to work closely with the Central Bank in bringing prosperity
to our country in a rapid manner,” the Minister said.
The country’s national savings grew from 17.8 percent to 23.9 percent
of the Gross Domestic Production (GDP) during last year. The domestic
savings also showed a growth of 18 percent during 2009 compared to 13.9
percent in the corresponding year. However, the investments recorded a
slight decline of 24.5 percent compared to 27.6 percent recorded in
2008, Central Bank Director, K.D. Ranasinghe said.
He said emerging countries such as Singapore, China and India has
national savings over 30 percent of their GDP. That is one of the
reasons why these countries have a high percentage in their investments.
“We were able to increase our national savings, which will support us
to increase our investments. The increase of the savings is an
encouraging sign as many investments are flowing into the country during
the post war,” Ranasinghe said. There was a mixed performance in major
sub-sectors. Agriculture and moderate industry sector performances were
commendable.
Although it showed a decline in manufacturing and a higher output in
agricultural sector and food due to the increased consumption in the
country with Northern province entering into the economy actively. He
said the country’s external sector recovered strongly amidst many
challenges. Exports grew by 20 percent in February 2010 with US$ 629
million. Out of the total exports 36 percent is exported to Europe while
22 percent is exported to the USA. Imports grew by 61 percent, which
recorded US$ 973 million while India is the main importer. Over 60
percent of the imports are from Asian countries and about 15 percent of
imports are from Europe and the USA.
Ranasinghe said remittances increased sufficiently to offset the
trade deficit. The private sector investments are 73.1 percent,
consumption 78.5 percent, private sector domestic savings were 120.6
percent and 66.5 percent were domestic credits.
“It is necessary to reform the tax structure and change the public
administration sector,” he said.
The Government expenditure increased up to 18.2 percent. The capital
expenditure, production capacity of the Government also increased. “The
main reason for the increase in Government expenditure was due to heavy
development projects. It will be an investment in the future as
developing the fundamental infrastructure will contribute immensely to
boost the country’s economy,” he said.
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