'Sri Lanka moving up ladder to reach US$ 4,000 per capita economy'

Vishmi Wijeratne

"Sri Lanka is moving up the ladder of growth with increasing momentum, preparing an environment for the next 'wave' of reaching the US $ 4,000 per capita economy." Speaking at the Bank Directors' Symposium on December 12, 2012, Koshy Mathai , a Member of the International Monetary Fund, said that a policy package introduced by the Central Bank of Sri Lanka in early 2012, was a meaningful decision taken, which had resulted in the credit growth.

"It was a bit too late for this measure to have been taken, but as it was better late than never and though it had been a painful process that affected growth, inflation and fiscal position, it had been a necessary measure which had resulted in credit growth and resulting in maintaining the stability of" economy, Mathai said.

He also said that that when looking at the world market, that not much of growth could be expected and thus, there was space for Sri Lanka to develop with the current momentum of growth. Mathai also said that though the growth in the Sri Lankan economy was substantially high, there was more to be developed.

"Though inflation had fallen bellow 8%, that it was still pretty high. When speaking about the bank's capacity in Sri Lanka, there around 18 banks who earn around US $3 billon per bank and around 100, 000 bank branches in 2010. but when compared internationally, the sector was relatively small, comparing with the economy it only provides the country 40% of its GDP . Thus, there was room to develop," he said. He said that banks need to be able to provide bigger loans to provide the economy and a long term in finance. He also said that this was a problem seen within the Asian region.