‘President placed economy on strong footing’

For the first time in the country’s history President Mahinda Rajapaksa has placed the country’s economy on a strong foundation as never before, said Economic Development Minister Basil Rajapaksa commenting on the 2011 Central Bank Report which was released recently.

Minister Basil Rajapaksa

The Minister who was addressing a progress review meeting held at his Ministry on Monday added that the country’s growth rate which was eight percent in 2010, a year after the ending of the war, had reached 8.3 per cent last year which was the highest growth rate recorded for the last 62 years since the Central Bank started computing its report. It was also the first time the country recorded a growth rate of eight percent or more for two years consecutively.

Minister Rajapaksa said that even though other countries had scaled down the projected annual growth rates due to the world economic downturn, Sri Lanka had to only make minor adjustments to its growth momentum due to the government’s sound economic management policies. Minister Rajapaksa said a country’s higher growth rate entailed certain other attendant problems.

When income levels increased it resulted in an increased demand for goods. The recent balance of payments crisis was caused by the increased demand for imports.

The recent changes made to the exchange rates would solve the balance of payments problems very soon. He said there had also been a sharp increase in foreign direct investment and the influx of tourists. The increase in the exchange rate of the dollar would further enhance remittances by the Sri Lankans employed abroad.