Central Bank Governor presents alternative economic frame work
View(s):Presenting a positive and alternative economic outlook while rejecting negative predictions based on the 2010 scenario, Central Bank Governor Prof. W.D Lakshman on Friday said the country could achieve 5.5 to 6 per cent GDP economic growth this year.
Balanced macroeconomic conditions will be created with political stability under a stable government capable of generating sustained and equitable economic growth, he added at a news conference in Colombo.
Alternative policy frame work is now being implemented in the coming years without any change or interruptions in medium and long term with the present political and economic stability, he disclosed.
This alternative strategy is aimed at low levels of inflation and well anchored inflation targeting will enable the Central Bank to ease monetary policy to support the economy, Prof. Lakshman said.
He expressed the belief that the country’s inflation will be maintained at 4 -6 per cent and the budget deficit at 8.5 per cent of GDP with a marginal surplus in the current account balance this year.
The targeted current account deficit will be around US$500 million, private sector credit growth Rs. 850 billion.
The Central Bank is striving to achieve the aims of maintaining economic and price stability, and financial system stability while encouraging and promoting productive use of resources of the country, he divulged.
He categorically stated that the present import restrictions of non essential consumer items including vehicles will prevail till the improvement of the balance of payment situation.
The government will be encouraging non debt-creating investments for development activities while negotiating with overseas agencies for funding to strengthen foreign reserves.
He expressed reluctance to divulge details on ongoing negotiations with regard to foreign financing while noting that there was no progress in discussions with IMF on further financial assistance.
The government is also focusing on investment projects with construction permits and other support to be given soon to revive key sectors. (BS)