Sept 26, Colombo: Sri Lanka continues to reap peace dividends after ending the three decade long war against terrorism showing strong growth in economy and the growth momentum will continue beyond this year, according to a government minister.
Speaking at the annual meeting of the International Monetary Fund and World Bank, Sri Lanka’s Minister for International Monetary Co-operation Sarath Amunugama said the international investor confidence on Sri Lanka has been improving steadily due to Sri Lanka’s improved macroeconomic management that has helped stabilize both the interest rate and exchange rate which are conducive for higher investments.
“Prudent monetary and credible fiscal policies that were implemented by my government have helped bring down inflation to a manageable level and maintain single digit inflation since 2009,” Amunugama said.
The Minister pointed out that the economy grew by 8 percent in 2010 which is the first full financial year after conclusion of the war and there is strong evidence of continuation of the growth momentum in 2011 and beyond as the first half of 2011 also grew by 8 per cent.
International rating agencies upgraded Sri Lanka’s sovereign ratings and revised outlook in a positive direction in the second consecutive year, he noted.
The fiscal consolidation process has steadily brought down fiscal deficits from 10 per cent of GDP in 2010 to below 7 per cent in 2011.
Speaking of future goals, the Minister said the medium term macroeconomic programme targets further fiscal consolidation aiming at bringing down debt to GDP ratio below 60% by 2016 as compared to above 100 per cent of GDP in 2004.
Describing the measures taken by the government to develop the war-torn North and East, the Minister said the government is implementing a comprehensive infrastructure development programme specially targeting the Eastern and Northern provinces.
Making progress in reconciliation efforts, the government has conducted local elections in both conflict-affected North and East and taking measures to hold the provincial elections for the Northern Province in the near future in order to establish an elected provincial administration, Minister Amunugama told the meeting.
Acknowledging the substantial assistance Sri Lanka receives from the multilateral and bilateral development partners and the renewed confidence placed by international investment community in Sri Lanka, the Minister expressed hope to strengthen those partnerships further.