Maintaining a proper infrastructure development throughout the country and reducing the poverty of our people will be very challenging yet possible with public and private sector support, Economic Development Minister, Basil Rajapaksa said.
He was speaking on a visit to the Central Bank yesterday.
Achieving the per capita income of US$ 4,000 will be possible with the viable economic environment in the country. The country recorded a positive economic growth amidst many challenges during the last two years, he said.
The Central Bank of Sri Lanka managed the country s banking and the financial sector in a firm manner where none of the banks collapsed due to the impact of the global financial downturn.
I hope to work closely with the Central Bank in bringing prosperity to our country in a rapid manner, the Minister said.
The country s national savings grew from 17.8 percent to 23.9 percent of the Gross Domestic Production (GDP) during last year. The domestic savings also showed a growth of 18 percent during 2009 compared to 13.9 percent in the corresponding year. However, the investments recorded a slight decline of 24.5 percent compared to 27.6 percent recorded in 2008, Central Bank Director, K.D. Ranasinghe said.
He said emerging countries such as Singapore, China and India has national savings over 30 percent of their GDP. That is one of the reasons why these countries have a high percentage in their investments.
We were able to increase our national savings, which will support us to increase our investments. The increase of the savings is an encouraging sign as many investments are flowing into the country during the post war, Ranasinghe said. There was a mixed performance in major sub-sectors. Agriculture and moderate industry sector performances were commendable.
Although it showed a decline in manufacturing and a higher output in agricultural sector and food due to the increased consumption in the country with Northern province entering into the economy actively. He said the country s external sector recovered strongly amidst many challenges. Exports grew by 20 percent in February 2010 with US$ 629 million. Out of the total exports 36 percent is exported to Europe while 22 percent is exported to the USA. Imports grew by 61 percent, which recorded US$ 973 million while India is the main importer. Over 60 percent of the imports are from Asian countries and about 15 percent of imports are from Europe and the USA.
Ranasinghe said remittances increased sufficiently to offset the trade deficit. The private sector investments are 73.1 percent, consumption 78.5 percent, private sector domestic savings were 120.6 percent and 66.5 percent were domestic credits.
It is necessary to reform the tax structure and change the public administration sector, he said.
The Government expenditure increased up to 18.2 percent. The capital expenditure, production capacity of the Government also increased. The main reason for the increase in Government expenditure was due to heavy development projects. It will be an investment in the future as developing the fundamental infrastructure will contribute immensely to boost the country s economy, he said.