2012 economic prospects positive:
SL will achieve 8 pc growth target - CB Governor
Despite the negative expectations of the recovery of the global
economy in 2012, Sri Lanka is confident of achieving an eight percent
growth target Central Bank Governor, Ajith Nivard Cabraal said.
“We are optimistic and we will explain our position and on what
stance we forecast our economic growth targets in the Road Map: Monetary
and Financial Sector Policies for 2012 will be released on January 3”,
However, the negative predictions on global economic recovery
continue and economists say that growth forecasts of Sri Lanka will have
to be downgraded. Professor of the London School of Economics, Razeen
Sally said in Colombo last week that Sri Lanka should be prepared for a
slow external environment with stimulus by deficit spending which has
failed in advanced economies. He also said that China and India are
“Many of the policy interventions in the wake of the crisis (2007
banking panic) have made matters worse,”. Fiscal stimulus packages have
by and large failed, huge amounts - hundreds of billions of dollars or
Euros - have been spent by central banks indulging in rather
questionable policy mainly buying government bonds in what is called
quantitative easing. Of course in addition to this, there had been huge
financial sector bailouts,” he told a seminar held in Colombo.
Meanwhile, FITCH Ratings cut emerging Asia’s growth forecast of 2012
to 6.8 percent from 7.4 percent predicted in June 2011. FITCH said that
the downgrade reflects both deterioration in outlook for the world
economy and the lagged impacts of policy tightening in some countries
including China and India.
Another stock brokering company DNH Financial said that the 8.4
percent GDP growth rate recorded in Q3 of 2011 is the world’s fourth
best. It has also pointed out that higher growth of the Sri Lankan
economy remains consistent with 8.2 percent in Q2 and 7.9 percent in Q1.