Recession an opportunity

To attract investors, upgrade infrastructure:

Ramani KANGARAARACHCHI

Sri Lanka has a high growth potential and a good opportunity to attract investors with strong infrastructure development and the challenge is to maintain a higher growth level, RAM Holdings Malaysia Group Chief Economist Dr.Yeah Kim Leng said.

Speaking on “Sustaining the growth and rebuilding momentum” at the CEO’s Breakfast Forum organized by the Institute of Chartered Accountants Sri Lanka(ICASL) he said when looking at the forecast the global financial crisis turning to recession is an opportunity for Sri Lanka to look at long term investment as rising China and India will have better confidence.

Referring to favourable short-term growth prospects he said the country’s economy is poised for a strong rebound in 2010, with its estimated GDP growth approaching 7 percent.

The economy is projected to expand 6.5 percent in 2011 followed by 6.3 percent in 2012.

The optimistic consumer and investor sentiments will contribute to the robust domestic demand while rising investment activity from the foreign and domestic private sectors will provide impetus to the growth forecast.

The services sector will benefit from the healthy domestic demand, which is expected to sustain a 7 per cent in both 2011 and 2012 and the industry sector is projected to expand 6.4 percent per annum over the next two years.

The medium to long term growth forecasts has been revised upwards from 5.5 to 6.2 percent per annum for the 2011 to 2015 period. The revisions are underpinned by several key factors such as a quicker than expected reduction in the country’s macroeconomic imbalances, the global financial crisis less severe impact on the domestic economy and the quick albeit fragile-global recovery and risisng confidence in the post conflict economic rebound.

An improving macroeconomic environment, coupled with fiscal and other structural reforms will energise the private sector and harness market forces to raise economic efficiency and productivity.