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Sri Lanka 2012 economic growth downgraded to 7.2-pct
Wednesday, 14 March 2012 - 5:32 PM SL Time
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Sri Lanka`s economic growth for 2012 has been downgraded to 7.2 percent from an earlier projected 8.0 percent, but inflationary pressures may remain weak, the Central Bank said amid measures to counter a balance of payments crisis.
The central bank raised policy rates in February, allowed a rupee peg to break in February after it lost more than a quarter of its foreign reserves, amid strong credit growth.
The state also raised energy prices, which will reduce future unproductive credit to state-run energy enterprises. The Central Bank asked banks to limit credit growth to 18 percent in 2012 from over 34 percent in 2011.
The central bank said slower credit growth, higher energy prices and lower imports will reduce economic activity this year.
`In that background, the Central Bank s projections now indicate that Sri Lanka`s GDP (gross domestic product) is likely to record a growth of 7.2 per cent in 2012, from the earlier projection of 8 per cent,` the Central Bank said in its March monetary policy statement.
`At the same time, the recent policy measures are expected to lead to a decline in aggregate demand which will have a moderating effect on prices, thereby offsetting to some extent, the supply side pressures on prices as a result of the recent upward adjustments to administered prices.`
The rupee has so far fallen to 123 from 110 levels last year resulting in a one-off increase in prices of all imported and exported products. The prices of non-traded items, especially services take longer to feed into a price index.
The state statistics office has said the inflation remained in the single digit by February up only 2.7 percent from a year earlier.
Sri Lanka`s balance of payments crisis was triggered partly due to large volumes of state credit taken to manipulate power prices in particular, through subsidized fuel after rains failed.
Data showed that credit to private business fell in January, a month before energy prices were raised, but state borrowings from banks rose to a new historic high.
Credit to private businesses from commercial banks fell to 44.6 billion rupees in January 2012 from 60.2 billion in December 2011. But credit to the state rose to a new monthly peak of 73.7 billion rupees, not counting central bank credit to the state.
The central bank said higher energy prices may push users to conserve energy and increase which may reduce imports.
Raising energy prices, even if not it does not significantly reduce energy imports, kills domestic demand by an equal amount, leaving less purchasing power in the hands of economic participants to spend on non-oil imports.
The correction, which comes mainly through a reduction in non-oil imports helps restore the equilibrium between the external and domestic sectors.
The central bank also started to inject liquidity into money markets from September 2011, to `sterilize` interventions made in forex markets, adding new demand to the economy, pushing a trade deficit above levels it can be financed by net inflows of foreign exchange.
The central bank said it was keeping its main policy rate at which money is injected to the market at 9.0 percent. Analysts say rates may have to rise to prevent further depreciation of the currency.
However the central bank has allowed market rates to move up. The active policy rate has moved from the 7.00 percent repo window where excess liquidity was parked by banks to the 8.50 percent reverse window after foreign exchange interventions drained liquidity.
The central bank itself raised policy rates by 50 basis points, making a total of 200 basis points increase in effective policy rates.
But the average prime lending rate has moved up 295 basis points to 11.99 percent by March 09, from a year earlier and the three month Treasury bill rate 314 basis points in the same period.
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Damed Senior Member
Joined: Jun 2006 Posts: 39601 Member Profile
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14 Mar 2012 11:09:38 GMT Report for Abuse
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Moda prem mokada kasanawada.....?
Missionariyage redda pallen watuna ekata kiyala thalluwak daganine... |
Damed Senior Member
Joined: Jun 2006 Posts: 39601 Member Profile
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14 Mar 2012 11:10:42 GMT Report for Abuse
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Investigations have revealed that the phone used by a deputy minister in Gampaha to threaten a Minuwangoda businessman and obtain Rs. 25 million from him is a number registered under a ministry.
Chinthaka Perera, the managing director of a private company, lodged the complaint to Minuwangoda police on February 27, and the complaint also mentions the deputy minister s name and the phone number.
Mr. Perera has bought a 25 acre land in Miniuwangoda.
Following this, the deputy minister has called the businessman and demanded Rs. 25 million from him, saying that he too has set his eye on the very land and measures to obtain it had cost him that amount.
Investigations have revealed that the number was a ministry number, which is being used by the deputy minister.
Police say that measures are being taken to question the deputy minister in question, after informing the court and obtaining a detailed bill.
100% Growth !
Edited By - Damed - 14 Mar 2012 11:12:16 GMT |
Roshan2007 Senior Member
Joined: Dec 2006 Posts: 16798 Member Profile
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14 Mar 2012 11:21:09 GMT Report for Abuse
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Cabraal interview..
http://www.washingtonpost.com/business/sri-lankas-cabraal-says-rupee-to-stabilize-over-time/2012/03/14/gIQAvhJsAS_video.html |
Damed Senior Member
Joined: Jun 2006 Posts: 39601 Member Profile
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14 Mar 2012 11:23:00 GMT Report for Abuse
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There are abductions - it happens, we are conducting investigations
Ajith Rohana
Police Superintendent
Growth ! |
Elampimp
Joined: Sep 2009 Posts: 4277 Member Profile
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14 Mar 2012 11:23:11 GMT Report for Abuse
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Missionariyage redda pallen watuna ekata kiyala thalluwak daganine...
oooeee natami beti uncle,
thamusay hama daa ma aka ma record aka thamai gahannay, nikan aka thanna pal una charitayak wagay....thamaagay wayasata hasiranawa modayak wargay geewat wannay natuwa...
Edited By - Elampimp - 14 Mar 2012 11:26:38 GMT |
Damed Senior Member
Joined: Jun 2006 Posts: 39601 Member Profile
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14 Mar 2012 11:26:13 GMT Report for Abuse
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Pimp the regime !
'Law of the jungle'
One of the few parliamentarians who regularly speaks out on human rights issues is Jayalath Jayawardana of the opposition United National Party.
'The human rights situation in Sri Lanka is deteriorating day by day and there is no rule of law in this country,' he told me at his office in Colombo.
'Jungle law is prevailing... Without the protection or blessings of the government in power or the security forces these type of things cannot take place,' he said.
And recent days have seen some unexpectedly revealing remarks from within the government.
An unnamed senior police officer in Colombo told a Sinhala-language newspaper that, as a precaution against possible street protests, 'we have arranged to bring tear gas, and we have plenty of white vans in Sri Lanka'.
And a cabinet minister, Vasudeva Nanayakkara, told the same paper: 'The government should answer for this missing people . They can't say we don't know about it.'
He said the military was getting excessively involved in civil affairs, stopping the country from being democratic and inviting international criticism.
Unusually, last Saturday a man publicly said he had foiled an attempt to abduct him - just weeks after his own brother disappeared.
With the help of a crowd the intended victim, the mayor of a Colombo suburb, Ravindra Udayashantha, confronted the would-be abductors who were in a white van. They were soldiers.
The military denied plans to kidnap anyone.
Whatever the facts behind that incident, the rule of law is being flouted in Sri Lanka and disappearances are continuing.
Edited By - Damed - 14 Mar 2012 11:26:46 GMT |
Damed Senior Member
Joined: Jun 2006 Posts: 39601 Member Profile
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14 Mar 2012 11:30:36 GMT Report for Abuse
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Comeing soon !
Sri Lanka's banks urged to limit credit for cars
Sri Lanka's central bank has asked banks to limit credit to buy motor cars, in a bid to reduce imports, as the country faced balance of payments pressure and lost more than a quarter of its foreign reserves.
The Central Bank said vehicle dealers had built up large inventories of cars over the past few months and banks may 'prudently consider the limitation of credit for the import of motor vehicles, which would, in turn, lead to the easing of pressure on import expenditure.'
Spot US dollar was quoted around 124.60/80 rupees in afternoon trade.
Sri Lanka has in the past jacked up taxes on goods considered by rulers and state officials to be 'luxury' for ordinary citizens, including motor cars which they get either completely tax free or at tax-slashed prices.
Edited By - Damed - 14 Mar 2012 11:31:37 GMT |
Damed Senior Member
Joined: Jun 2006 Posts: 39601 Member Profile
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14 Mar 2012 11:32:34 GMT Report for Abuse
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Greece !
Miracle going to catch you !
Cabbbbbraaaa......l
Edited By - Damed - 14 Mar 2012 11:34:52 GMT |
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