New growth strategies and newer ways to attract more remittances from Sri Lankan expatriates are among the plans by the Central Bank (CB) next year to meet challenges from the twin shocks of the global financial and economic crises.
Central Bank Governor Nivard Cabraal said increasing the momentum on growth within the country was among the plans envisaged in next year’s development 'Road Map' to be announced next week.
He said a recent announcement by the World Bank (WB) that growth in Sri Lanka had propelled the country to middle income status, meant the country did not have access to concessional credit and would not qualify for certain loans and technical assistance.
"This is the case when the per capita income grows. Sri Lanka's per capita was $1617 in 2007 while this year it would close to or go beyond $2000," he said, adding that the WB was encouraging countries like Sri Lanka to be more market-oriented in securing their funding sources.
The government has borrowed millions of dollars on commercial terms in the past two years from foreign banks to fund state spending.
The WB's Annual Report for 2008 says growth is propelling parts of Sri Lanka into middle income status, along with several Indian states, Bhutan and the Maldives.
The Colombo University’s senior economics lecturer Sirimal Abeyratne said that although progress had been made, it was still nothing to boast about as it had taken Sri Lanka a long time to reach this level compared to other Asian countries which took two to three decades.
Malaysia, Singapore, Taiwan, Hong Kong and even some lower middle income countries which lagged behind Sri Lanka have now surpassed it.
The WB's classifications are based on per capita income which indicates that income in Sri Lanka has grown to more than US $1,600 per year which is an encouraging development.
However, it also indicated that Sri Lanka would not be eligible for concessionary grants and loans in the future and had to be more independent in terms of foreign financing, Dr. Abeyratne said.
Governor Cabraal said that while the economy performed well in the first two quarters of the year, the third quarter since September was challenging due to the unexpected upheaval in the US and the rest of the world. He said he saw economic growth this year at between 6.2 and 6.3 percent. (NG)