Lanka beats global recession
*Targets six percent growth rate in 2010
*Stable macro-economic environment vital
Lakshmi DE SILVA
Sri Lanka has come out of the global economic crisis and would
achieve a economic growth rate closer to six percent in 2010, Institute
of Policy Studies Executive Director Dr. Saman Kelegama said.
Sri Lanka should bring down the budget deficit and create a stable
macro economic environment to make this growth sustainable and move
further, he said .
Addressing a press conference at the launch of ESCAP report 2010 at
the Sri Lanka Foundation Institute, Colombo, he said Sri Lanka’s actual
potential growth rate was above eight percent and can reach even nine to
10 percent like India and China. The two key impediments to achieving
high growth are now out of the way.
The war that ravaged the economy for two and half decades and a lack
of political stability and the need to give priority to political
coalition management over economic management issues is no longer
prevalent, he said.
Making a presentation with a special focus on Sri Lanka’s economy
from economic recovery to sustainable growth Dr. Kelegama further said
though inflation was brought to a single digit level in 2009, on the
fiscal side, expenditure far exceeded revenue, thus resulting in a
budget deficit of 9.8 percent GDP.
Though the two and half decade war came to an end the government
expenditure on the IDP resettlement programs, North and East
reconstruction work and infrastructure development work was high and the
capital expenditure cost was 5.7 percent of GDP
The Current year’s international oil and food price escalations would
also be a challenge, he noted.
There were six State-Owned Enterprises making heavy losses. The
Ceylon Electricity Board, Ceylon Petroleum Corporation, Sri Lanka Postal
Services, Sri Lanka Railway, SriLankan Airlines and Mihin Lanka were
making a loss of around Rs 45 billion which was close to 1 percent GDP
during 2009. These enterprises need to be made break-even and then
profitable, he explained.
The Economic Development Ministry has to play a vital role similar to
the role played by the Trade and Industry Ministry played in Japan after
the World War during its development drive, he noted.
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