The Ceylon Chamber of Commerce this week called on the government to address inflation and rising cost of credit.“Today with inflation fast approaching 28% these issues have developed into a major and unwelcome challenge for most businesses,” said the outgoing chairman of the Ceylon Chamber of Commerce, Mahen Dayananda speaking at the 169th AGM of the chamber on Monday.
The business chamber noted that increasing government expenditure was adding to inflationary pressure and called on the government to address this situation on an “urgent and immediate basis.”The chamber also noted the increasing cost of credit in the island. “The cost of money in today’s context could be in the range of 18 – 24 percent or even higher, depending on specific circumstances. Needless to say, this impacts heavily on overall investment and a host of business decisions,” said Mr Dayananda
“It is inevitable that both inflation and interest rates cannot be addressed in tandem. One controls the other and we could only hope that a reasonable balance will prevail,” he said.
The chamber also noted the poor performance of the tourism sector. “Total earnings from this sector during 2007 were a mere US$.385 million – well below its potential,” said Mr Dayananda.
However, the chamber also noted that exports and commodities, such as tea, rubber, coconut and even spices have shown growth. The government’s infrastructure development programme was also welcomed.
“It is encouraging to note that Infrastructure requirements are being addressed on a far more urgent and pro-active basis by the government. Adequate infrastructure is an absolute ‘sine – qua – non’ if our economy is to keep pace with the rest of Asia and indeed the developing world,” said Mr Dayananda.
Mr Jayampathy Bandaranayake, chairman of Ceylon Tobacco, took over the reins as chairman of the Ceylon Chamber of Commerce this week.