Eight per cent economic growth targeted for 2008

Shirajiv SIRIMANE

Sri Lanka can achieve an 8 per cent economic growth next year, Central Bank Governor, Ajith N. Cabraal said at the launch of the Web portal of Sri Lanka German Business Council (SLBGC) yesterday at the Ceylon Continental.

He said that Sri Lanka had achieved an economic growth of 7.4 per cent recently. However due to high oil prices, granting of subsidies and other overheads such as importing wheat and milk powder at high costs the country would not be able to achieve a 7 per cent growth end of this year.

“However I am confident that Sri Lanka can reach a 8 per cent growth by end of next year,” he said.

He added that inflation could be reduced to a single digit by next year-end. “We had targeted to reduce

inflation by the end of this year. However due to a Government’s policy decision to continue with providing various handouts it was extended by one more year,” Cabraal said.

The Governor also said that the country’s per capita income is more than that of the other countries in the region. Western Province enjoys a per capita income of around US$ 1900 income. However countries such as Malaysia boast of a per capita income of around US $ 4000.

“If Sri Lanka can maintain an economic growth around 8 per cent three to four years, the country too can look to a per capita income of around US$ 4,000,” he said.

Cabraal said the Government has already commenced major infrastructure development projects such as the Southern Highway, Colombo Port development, Hambantota harbour, Weerawila Airport and several power generation projects.

He noted that the private sector also has to play a vital role in the development process especially in the agricultural sector. He added that there is a vast untapped potential in the fisheries sector and abundant business opportunities in the Eastern province.

Airing his views on the leisure sector he stressed the local hotel rates are far below than the other countries in the region.

“The country must try to increase their rates. The leisure sector should also try to have more boutique hotels to attract the up market clients and high spenders,” Cabraal said.

The Third Secretary of the German Embassy, Caroline Heun, unveiled the new web portal of SLGBC. The 75 member council hopes that this web site would fill the major void which exporters in both countries experience. The portal would also be linked to the German Embassy web site.

Appeal exports and traditional exports such as tea are the main exports to Germany while industrial goods, motor vehicles, technical expertise and tourism are the key areas Germany is involved in.