The country will surpass the US$ 4,000 per capita income mark next year, Central Bank Governor Ajith Nivard Cabraal said.
"By 2016, we will come closer to a per capita income of US$ 5, 000," he said.
He said the Gross Domestic Product growth of the country is 7.8 percent. "Inflation has been in the single digit for the past 16 months which Sri Lanka is not used to," he said. The CB Governor noted that the country will enjoy a low inflation rate and maintain same in the future too.
Addressing the Capital Market Conference 2014 organized by the Security Exchange Commission of Sri Lanka, yesterday (Oct. 9) the Governor said that the Government is targeting Foreign Direct Investments amounting to US$ 2 billion. "If we had a target of US$ 200 million, that was deemed fantastic eight years ago. The numbers are different from what we aspired for eight years back," he said.
Cabraal said Sri Lanka has moved from a vicious cycle economy to a virtuous cycle which is an important element in the macro-economic management. He said the country's economy has shown the highest growth continuously for the past few years since the liberalization of the economy.
"Sri Lanka was moved from a vicious cycle that we were trapped in for nearly five decades to a virtuous cycle which is an important element in the macro management," he said.
The Central Bank Governor said the administrators and other stakeholders in the economy are striving to preserve this virtuous cycle. "We have a great need and commitment to maintaining this virtuous cycle," he said. He said it was President Mahinda Rajapaksa who wants to set higher targets in terms of the per capita income of the country.
"He wants to promote the per capita income of US$ 1,200 in 2006 to 4,000 by 2016.The President wants us to be completely different from where we were in 2006 by 2016 (from 1,200 to 4,000). It was a challenge for the country's economic planners," he said.
The Governor said the Central Bank was able to create a new mindset in the people that they could look forward to better economic times.
"When we started the new wave of development in the country in 2006, there were many who believed that these ambitious plans that was being unfolded would not be realized", he said He said that these dreams have come true and Sri Lanka has make tremendous achievements in almost all sectors of the economy. "Our macro fundamentals keep pace and propels the new wave of development," he said. "We stressed the need for a new set of macro fundamentals eight years ago. It was challenging at the beginning. I believe that we have been able to achieve progress.
The Governor said that the public debt is coming down. The public debt which was 91 per cent in 2006 will come down to 75 per cent at end of this year. "Sri Lanka stands out as a key performer in all capital markets in the region. It has had the best performance since the end of the conflict. The post conflict stock market performance is also strong," he said. The Governor added that plans have already been formulated to make the country's economy more robust to achieve a per capita income of US$ 7500 by 2020. "We would have GDP of 150 billion dollars by 2020 where we will have a per capita income of 7,500 US$. The economic growth average is expected to reach an average of 8 per cent in 2020. Inflation is to be maintained a little below the present level and poverty 3 per cent in 2018, he said.