‘Monetary policy revisions to boost SL’s GDP growth in ‘13’
Sri Lanka’s current account deficit has reduced and foreign exchange
reserves have stabilized, said Shuvojit Banerjee, Economic Affairs
Officer, UN –ESCAP.
He expressed these views at the launch of ESCAP Annual Report
“Economic and Social Survey of Asia and Pacific,” in Colombo. The easing
of both monetary and fiscal policies in the country would help to
improve the GDP growth to 6.5% in 2013 and all major sectors,
particularly the agricultural sector will demonstrate improved
Though, the budget deficit in Sri Lanka is still high, it has been
reducing in recent years to 7.8% of GDP in 2011 and 8.1% of GDP in 2010.
On the demand side, the investment to GDP ratio has been improving and
crossed the 30% mark in 2012. Both exports and imports contracted in
2012 due to the global slowdown, which helped in containing the trade
Tighter monetary and credit policies slowed credit and import growth.
Strong growth in workers remittances by 16.3% helped in narrowing the
current account deficit to about 5% of GDP in 2012 from 7.8% of GDP in
2011,” Banerjee said.
Banerjee added, “A renewed look should be given to forward looking
macro economic policies in countries in South Asia in general whilst
investing in inclusive and sustainable growth.
Monetary policy needs to strike a balance between curbing
inflationary expectations and reviving growth.
Measures should also be given to overcome a number of development
challenges; poverty and hunger, rising inequality, poor level of human
development, wide infrastructure gaps, lack of a diversified base for
high value added products and exports, widespread food and energy
security and high risk of disasters to achieve the desired economic
growth in this region.