Sri Lankans 6.8% more prosperous – Central Bank
View(s):Sri Lankans have become 6.8 per cent more prosperous. Or at least that’s what the country’s Central Bank signalled recently, a result of its Sri Lanka Prosperity Index 2012. The newest edition of this composite index showed its increase to 66.8 in 2012 compared to 62.5 in 2011
Consisting of three sub-indices, Economy and Business Climate, the Well-Being of the People and the Socio-Economic Infrastructure, the Prosperity Index measured just 26 variables at national and provincial levels until 2011. For 2012, the indicator added 16 new variables, making it a composite of 42 in total. This included domestic savings as a percentage of GDP, Foreign Direct Investments, Workers’ Remittances, Doing Business Index, Non Performing Loans Ratio and Commercial Banks Loans and Advances to the Agriculture and Fishing, Industry and Services sectors, all in the economy and business climate sub-index. Also encompassed, per capita expenditure on health and education, percentage distribution of households by ownerships and households with consumer durables such as washing machines, TVs, etc., in addition to percentage expenditure on entertainment and travel and even internet and email facilities per 1000 people. These being contained in the well-being of people and socio-economic infrastructure sub-indices.
In fact, the Central Bank commented; “The new variables introduced have been in the areas of economy, business climate, health, education and economic infrastructure and have resulted in the index becoming even more representative of the country’s conditions than previously”.
Further, a Central Bank statement also revealed; “The most marked improvement was observed in the Socio-Economic Infrastructure sub-index, which rose by 8.2 per cent in 2012 from 6.7 per cent in 2011. The Economy and Business Climate sub-index increased by 5.3 per cent, while the Well-Being of the People sub-index increased by 6.9 per cent in 2012″.
Also visible, both the Prosperity Index and its sub-indices had experienced steep increases beginning from 2009, prior to which there was mostly stagnation, within the 45.0 to 55.0 points range, according to available data from 2007.
Noting further, the Central Bank statement also noted; “The SLPI was introduced in 2008 in order to fulfill the need for a composite indicator to assess the overall status of prosperity in the country as a whole and in each of its provinces. The Prosperity Index enables national policy makers, provincial authorities, and business and community stakeholders to measure the prosperity of provinces in a more holistic manner. This index could also be used to identify strengths and weaknesses of provinces and to formulate policies for attaining higher standards and to reduce regional disparities leading to balanced growth in the country”. (JH)