‘Agricultural and industrial sectors leaving much to be desired’

Governor of the Central Bank Dr. Indrajit Coomaraswamy delivering the keynote address recently at the Sri Lanka Economic Association ( SLEA),32nd annual sessions said the agricultural and the industrial sectors were not performing at optimum levels.

The main theme for the annual sessions of the SLEA was the progress or otherwise of the agricultural and the industrial sectors and issues thereof.

Accordingly, Dr. Coomaraswamy placed these subjects as priority areas that had to be addressed and eventually rectified. He said agriculture exports were barely at 2.5 million dollars, which was a clear indication that there was much to be done to improve the sector, which was lagging behind. Industry at 29 percent was no better. However, both sectors are areas of priority that should necessitate action. The Central Bank ( CB), would take effective and meaningful action to ensure progress of these sectors. Modernization of industry would be a focus area that would be a part of fiscal reforms. For instance, mechanization.

The maturing debt position was daunting, particularly because debt dues expected in 2018 and 2019, had to be realized. Fiscal discipline and fiscal consolidation was now a matter of priority . Investment was key to easing out the economic position of the country. He said stability and macro economic fundamentals had to be in place to address the high inflation progressively affecting the country. Coomaraswamy said the country was making progress in stabilizing the economic structure based on a sound fiscal strategy.

‘The Fiscal Responsibility Management Bill being drafted will shortly be part of the statutes, for consistency in policy, he explained.

Commenting on the framework on monetary policy he said the CB was initiating a flexible inflation, targeting review of progressive monetary policies. He also made the point that fiscal progress meant that such progress would be supported by a legal accountability framework.

However, the real estate sector showed a growth of 15 percent. He also said worker shortages were affecting the plantation sector and impacting production.

The Central Bank was moving away from an antiquated framework of economic strictures into areas such as rain water harvesting, food safety and land use