Economists,
commerce
and
business
leaders
welcomed
the
upgrade
of Sri
Lanka to
the
status
of
'Middle
Income
Emerging
Market'.
This is
a very
encouraging
development
and we
highly
appreciate
President
Mahinda
Rajapaksa's
work to
uplift
the
country
especially
in the
industrial
and
agricultural
sector',
stated
Mr. Lal
de Alwis,
President
of the
National
Chamber
of
Commerce.
We
specially
appreciate
the tax
free
income
given
for the
agriculture
sector
so that
money
can be
reinvested
to push
up the
economy.
I think
this has
mainly
contributed
to
economic
development
and for
IMF to
upgrade
Sri
Lanka to
this
status,
he
further
stated.
Mr. de
Alwis
added
that Sri
Lanka's
economy
is based
on
agriculture
and the
government's
stance
to
promote
agriculture
is
highly
commendable.
Commenting
on Sri
Lanka's
achievement,
Mr.
Kumar
Kandalama,
Secretary
General/
CEO of
the
National
Chamber
of
Industries
said
that it
was
welcome
news to
most
people
in the
industry
and most
sectors
in the
country.
It is
definitely
a
positive
development.
The
country
has
achieved
a
significant
growth
with
income
levels
growing.
This has
been
evident
for the
past few
years
when
President
Mahinda
Rajapaksa
was in
office.
The
people's
income
level
has
grown;
it is
far
higher
than the
last
decade.
This is
very
appreciable.
We are
happy
about
this
position
and the
benefits
should
go right
across
the
spectrum
instead
of being
limited
to a
specific
sector
or
community,
he
stressed.
Sri
Lanka
received
the
status
of
'Middle
Income
Emerging
Market',
with the
International
Monetary
Fund
(IMF)
graduating
Sri
Lanka
from the
list of
Poverty
Reduction
and
Growth
Trust (PRGT)
eligible
countries
on 11
January
2010.
This
upgrade
would
facilitate
Sri
Lanka to
project
itself
strongly
in
international
financial
and
capital
markets,
states
the
Central
Bank.
A
country
graduates
from
PRGT
only if
it, (i)
has
enjoyed
income
per
capita
well
above
the
International
Development
Association
(IDA)
threshold
for a
number
of
years,
(ii) has
the
capacity
for
durable
and
substantial
access
to
international
financial
markets,
and
(iii)
does not
face
serious
short-term
vulnerabilities.
According
to the
Central
Bank,
the
Executive
Board of
the IMF
has
taken
into
account
the
following
specific
factors
in
considering
of Sri
Lanka’s
graduation.
i.
The
strong
economic
performance
in
recent
years
that has
substantially
lifted
Sri
Lanka’s
per
capita
Gross
Domestic
Product
(GDP) to
US
dollars
2,014 by
2008,
well
above
the
prevailing
IDA
threshold,
and its
per
capita
Gross
National
Income (GNI)
has not
been on
a
declining
trend
for the
last 5
years.
The
strong
growth
performance
has
signalled
substantial
resilience
to
shocks,
including
shocks
to oil
prices,
and to
the
expiration
of the
Multi-Fibre
Agreement.
ii.
The
availability
of an
IMF
Stand-by
Arrangement
facility
as
approved
in July
2009 to
cushion
the
impact
of the
global
crisis.
Further,
the
economic
developments
under
the
programme
have
been
stronger
than
expected,
with GDP
growth
expected
to
return
to
almost
pre-crisis
levels
in 2010,
while
exports
have
been
showing
signs of
recovery.
iii.
The
country’s
public
external
debt
being
projected
to
decline
gradually
over the
medium
term.
Although
debt
dynamics
remain
sensitive
to
currency
depreciation
and
export
shocks,
the
timely
implementation
of
fiscal
consolidation,
as
envisaged
in the
Stand-by
Arrangement
programme,
will be
crucial
to
ensure
that the
public
debt
remains
on a
sustainable
path.
iv.
The
country’s
ability
to
access
international
capital
markets
in the
past
years
and its
ability
to meet
the
market
access
criterion.
Oversubscription
of the
recently
issued
five-year
sovereign
bond
reflected
the
progress
made
under
the
Fund-supported
program,
and
signalled
good
prospects
for
continued
access
to
international
capital
markets.
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