Sri Lanka to sustain over 8% growth

“These policy measures along with uncertain global developments are likely to have some adverse transient effect on prices this year,” the bank said.

The Central Bank has already lowered its 2012 growth projection to 7.2 per cent from a forecast of 8.0 per cent made last year. The island’s per capita income has increased

to USD 2,836 from 2,400 in 2011.

Inflation at 6.7 per cent remained subdued at single digit levels for the third year in succession and unemployment had dropped to a record 4.2 per cent. Foreign direct investment has exceeded USD 1 billion for the first time up from 516 million in the previous year.

“FDI inflows remain significantly below potential level and the country is yet to establish itself as a key destination for new FDIs,” the bank said.

Tourism,a key area of focus since the war with the LTTE ended three years ago,had recorded 850,000 arrivals with USD 830 million as earnings.

Sri Lankan expat workers’ remittances reached USD 5.1 billion,the bank said,adding that their remittances were not sufficient to cover the huge trade deficit.

Faced with fears of the balance-of-payments crisis going out of control the government last week revived International Monetary Fund (IMF) bail out package stalled for sometime.

The IMF released USD 427 million instalment as part of the 2.6 billion package aimed to build Sri Lanka’s foreign reserves.