CB Governor projects over 4% economic growth | Sunday Observer

CB Governor projects over 4% economic growth

The economic growth rate will be a shade of four percent this year, Central Bank Governor Dr. Indrajit Coomaraswamy told a CFA Society of Sri Lanka book launch at the Institute of Policy Studies last week in response to a question by journalists whether the Central Bank has revised its growth projection for the year.

“The growth rate for the year will touch four percent but certainly not below that,” the Governor said.

Growth forecast for the year was revised down by the Central Bank to four percent from its initial projection between 5 and 5.5 percent at the beginning of the year. Growth in the first half of the year moderated to 3.4 percent according to the statistics. According to the International Monetary Fund, economic growth for the year is expected to be at 4-4.3 percent.

However, economists opine that notching four percent growth this year will be an uphill task as the country faced upheaval from many fronts. The surge in global oil prices reaching US$ 82 a barrel, the US-China trade war, the aggravation of the Middle East crises and turbulence in the domestic front are expected to have a heavy toll on economic growth.

With regard to the servicing of loans which is expected to grow from next year and the down grading by rating agencies on Sri Lanka’s external financing and repayment of loans, the Governor said the ratings on Sri Lanka’s debt repayments were unwarranted hasty moves. He said Sri Lanka is in a quite a good position to meet its debt obligations as the Central Bank is working on swap lines with other central banks.

However, the Governor cautioned that the country must maintain fiscal discipline and avoid populist measures to garner support from voters during elections.

Elaborating on the need to improve financial literacy on which two books launched by the CFA Society was launched, the Governor said Sri Lanka was second only to Japan relating to financial literacy sometime back, but down the years, the country’s financial literacy rate had stopped growing.

Dr. Coomaraswamy said, “Sri Lanka has a high print literacy rate compared to its South Asian peers, however, the country has the highest gap between print literacy and financial literacy in the region. Only seven percent of the labour force consists of entrepreneurs compared to global standards of around 30 percent. This shows there is scope to promote financial literacy among Sri Lankans”.

The author of the book ‘Financial Literacy to Achieve Your Financial Well Being’ and CFA, Advocacy Chair of CFA Society Sri Lanka, Ravi Abeysuriya, said politicians thrive on the financial illiteracy of the people, and added that higher financial literacy rate will boost entrepreneurship in the country. The second book, ‘Entrepreneurship: The journey of an Entrepreneur’, was authored by CFA Advocacy Co-Chair of CFA Society, Sri Lanka, Sidath Kalyanaratne.