It was in the period after 2009, when 30 years of prolonged terrorism was eliminated that Sri Lanka was able to maintain the longest period of low inflation for the first time in the country’s post independence history. Inflation was four percent last month, said Central Bank Deputy Governor Dr. Nandalal Weerasinghe.
He made these observations yesterday addressing around 90 tri service personnel and officials from the Ministries of Defence and External Affairs of 17 countries.
He delivered a speech on ‘Sri Lanka National Overview’ on the first day of the multinational planning augmentation team Tempest Express 24 Staff Planning workshop at the Galadari Hotel. The workshop which began on March 31 will be held until April 9.
The Deputy Governor said the inflation rate was 12 percent since the 1980s to 2009 due to the grave imbalance of the fiscal deficits of the government as a result of utilizing a vast amount of money on combating terrorism and the uncertain security situation.
He added that since 2009 due to the eradication of terrorism and positive economic policies implemented by the government the inflation rate dropped and was maintained at a single digit since then.
Dr. Weerasinghe added that the rate was below five percent last year and four percent last month. He said Sri Lanka was able to maintain the economic growth rate above seven percent since 2009. “It was around 4.7 percent before 2005 and the rate increased to eight percent in 2010 and 2011 whereas it is 7.3 percent by now.”
Dr. Weerasinghe said due to the economic and political stability that has been brought about, direct foreign investment has been increased to US $ 1 billion whereas it was only about US $ 200 million before 2006.
He said from next year, it is hoped that direct foreign investment will be US $ 2 billion each year. “The end of terrorism in the country has stopped the destruction of property, loss of lives and enhanced confidence in the investors,” Dr. Weerasinghe said.
The Deputy Governor said the government has envisioned a US $ 100 billion economy by 2016 while it is US $ 60 billion by now.
He added that the economy was US $ 59 billion last year.
“With such an expansion of economy by 2016, the per capita income will be above US $ 4,000 which is US $ 3,000 this year. We are getting into the category of middle income country.” He added that the challenge that we face when we reach middle income status is that we have to find new growth sources to drive the economy growth forward. The government has identified five plus one hub strategy including tourism and implementation is in progress.
The international workshop organised by the US Pacific Command together with the office of the Chief of Defence Staff, Defence and Urban Development Ministry is being attended by participants from Vietnam, Canada, Bangladesh, Australia, Philippines, New Zealand, Nepal, Maldives, Cambodia, Indonesia, Malaysia, Mongolia, Singapore, Thailand and Japan.