Sri Lanka’s economy making headway says Central Bank Governor Cabraal
Daily News: The Sri Lankan economy is making headway, despite the pandemic related disruptions and with the gradual return to normalcy Governor Central Bank Ajith Nivard Cabraal told the Monetary Policy Review press briefing.
“After phasing out the COVID-19 related lockdown measures, alongside the successful rolling out of the C-19 vaccination programme and growth supportive policy measures, the momentum of economic activity is expected to sustain in the period ahead. The Sri Lankan economy witnessed a strong recovery during the second quarter of 2021, recording a real growth of 12.3%, year-on-year, following the growth of 4.3% year-on-year, in the first quarter of 2021.
“We see several positive sentiments in the economic activity and along with the bounce back of tourism we project that Sri Lanka will end 2021 with a 5% growth rate and in the first quarter of 2022 growth increase to 6.5%.”
He said though there are dips in foreign remittances this too will increase as currently over 100,000 people are bound for overseas employment in the next two months. “Monthly exports too are passing the US dollars one billion mark,” he said.
The global economic recovery is expected to continue, despite large disparities across countries and is projected to grow by 5.9% in 2021 and 4.9% in 2022.
Expenditure on imports has also increased, partly reflecting the surge in global commodity prices and the recovery in domestic economic activity, resulting in an expansion in the trade deficit during the eight months ending August 2021, over the corresponding period of last year. He said that the global energy prices have increased drastically and hinted that there may be another price revision to match this.
“Several other commodity prices like LPG gas, milk powder too have increased in the global market and hence there is a local commodity price increase,” he said. The surge in global commodity prices prompted the Government to remove maximum retail prices on several essential commodities. Reflecting the increased demand for credit amidst the low interest rate environment, credit extended to the private sector expanded as envisaged during the eight months ending August 2021.
Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery after facing the impact of the global Covid pandemic. Many key economic sectors in the country have shown a steady growth even despite pandemic challenges. Also, many private sector companies have shown a gowth momentum as well as record profits. Sri Lanka is also working towards becoming a business hub in the South Asian region supported by the country’s geographical positioning in the Indian Ocean, the many trade agreements as well as concessions enjoyed by the country along with its business conducive environment. The ongoing development programme has also helped boost Sri Lanka’s economic potential as many economic sectors have shown a growth momentum despite pandemic challenges.
|Article Code :||VBS/AT/20211021/Z_4|