Economy achieves new peak

Unemployment down to all-time low 6.3 per cent:

Rasika SOMARATHNA

COLOMBO: Last year’s economic growth rate of 7.4 per cent was the highest since the country recorded a growth margin of 7.9 per cent in 1978, Deputy Governor of the Cental Bank W.A. Wijewardena told the Daily News yesterday.

The Deputy Governor said the present inflation rate which hovers around 19 is expected to come down to around 11 in the near future.

The unemployment ratio had come down drastically in recent times would come down further with the growth of infrastructure and the Government’s development drive, specially in rural areas, he said.

The labour force increased to approximately 8.2 million by end 2006 and as a consequence the unemployment rate declined to its lowest level of 6.3 per cent in the second quarter of 2006.

The Deputy Governor said that taking into consideration the current situation the Bank expected a minimum growth of 7.5 per cent for 2007.

The successful implementation of the Government’s 10-year development plan would ensure that Sri Lanka’s per capita income would double in the next six years while minimising economic disparity between the Western Province and other provinces, Central Bank sources said. Sri Lanka has now become a middle-income country with its per capita income reaching 1,355 US dollars.

The Bank has attributed the resilience of the Sri Lankan economy in the face of adverse developments in the international and local arena, to the implementation of favourable economic policies and the confidence among private sector and investors regarding the stability of the Government backed by a strong President.

Central Bank Governor Ajith Nivard Cabraal earlier said key projects in the areas of road development, port and airport development, power generation and social infrastructure would result in sustainable and broad-based growth this year.

“We expect all the three sectors, agriculture, industry and services to grow at healthy rates,” Cabraal said.

The Central Bank’s Financial System Stability Report for 2006 said the financial system in Sri Lanka is resilient and there are no imminent threats that may endanger its stability.

The Bank has highlighted the need to maintain a sustainable high growth in excess of eight per cent in the medium-term as projected in the 10-year vision - the policy document of the Government.

Economic expansion was broad-based in 2006 as all sectors grew at healthy rates. The agriculture sector grew by 4.7 per cent contributing 11.1 per cent to the overall growth while the industry sector grew by 7.2 per cent contributing to 27 per cent to the overall growth.

Contribution from the services sector was the highest at 62.6 per cent as the sector grew by 8.3 per cent during the year.