The Sri Lankan economy is projected to grow at a slower rate of 7.2 per cent in 2012 compared to the impressive growth rate of 8.3 per cent recorded in 2011, the Central Bank admits. With the expected revival in the global economy, the economy is however expected to regain pace next year expanding by around 8 per cent and continue to grow over 8 per cent per annum over the medium term.
“The increase in capacity utilisation, improved productivity and diversification supported by continued development of infrastructure facilities, and continued expansion in income generating activities in the Northern and Eastern provinces will provide the basis for sustained growth over the medium term,” the Central Bank highlighted in its 2011 Annual Report released last week.
It noted that in order to sustain the expected high growth, investments are required to be raised gradually to around 32-33 per cent of GDP in the medium term, and this level of investment is mainly expected from domestic savings.
However, in 2011 domestic savings declined from 19.3 per cent in 2010 to 15.4 per cent as domestic consumption (as a percentage of GDP) increased from 80.7 per cent in 2010 to 84.6 per cent. On the other hand, total investment as a percentage of GDP increased from 27.6 per cent in 2010 to 29.9 per cent in 2011 as private investment increased from 21.4 per cent in 2010 to 23.7 per cent in 2011 while public investment increased marginally to 6.3 per cent from 6.2 per cent in 2010.
“The increase in capacity utilisation, improved productivity and diversification supported by continued development of infrastructure facilities, and continued expansion in income generating activities in the Northern and Eastern provinces will provide the basis for sustained growth over the medium term,” the Central Bank highlighted in its 2011 Annual Report released last week.
It noted that in order to sustain the expected high growth, investments are required to be raised gradually to around 32-33 per cent of GDP in the medium term, and this level of investment is mainly expected from domestic savings.
However, in 2011 domestic savings declined from 19.3 per cent in 2010 to 15.4 per cent as domestic consumption (as a percentage of GDP) increased from 80.7 per cent in 2010 to 84.6 per cent. On the other hand, total investment as a percentage of GDP increased from 27.6 per cent in 2010 to 29.9 per cent in 2011 as private investment increased from 21.4 per cent in 2010 to 23.7 per cent in 2011 while public investment increased marginally to 6.3 per cent from 6.2 per cent in 2010.
No comments:
Post a Comment