Sri Lanka aims to grow by 7.5% in 2013

Sri Lanka's Central Bank released its economic Road Map for 2013 here on Wednesday projecting an upbeat 7.5 percent growth, single digit inflation and a better investment climate despite challenging local and global economic woes. The yearly event was attended by policy makers and top private sector officials. Central Bank Governor Ajith Nivaard Cabraal was buoyant on Sri Lanka's post-war progress despite 2012 growth being a moderate 6.5 percent in 2012. "I know Sri Lanka has begun a new journey since the end of the war and we are only 3 years old. At the end of 2012 our economy had come to a very positive situation. If you take economic growth, level of investment, inflation, unemployment, external trade, tourism every area you would see that there has been an improvement from the previous year," he said. Dismissing criticism on the 2012 Road Map that failed to meet Foreign Direct Investment targets of 2 billion U.S. dollars and 10 billion U.S. dollar expectations on exports among others, Cabraal emphasized macroeconomic stability, flexible exchange rates, higher remittances, increased earnings from tourism and single digit inflation as positives in the year ahead. "Our monetary policies will be based on a multidimensional approach, we will look at our policy priorities, which will be maintaining inflation at single digit levels, ensuring continuous economic growth, maintaining low unemployment and maintaining exchange rate stability." Government expenditure on capital investments will continue to be high to continue massive infrastructure projects, largely funded on loans from China. In addition, the Central Bank also loosened exchange control policies. This means that time restrictions on foreign exchange transactions and new regulations on remittances and non-resident investment accounts have been changed. Debt as a percentage of GDP climbed to 81 percent in 2012 and Cabraal insisted that this would be reduced to 78 percent this year. The Sri Lankan government is also attempting to increase production, moving to renewable energy to double per capital income to 4,000 U.S. dollars by 2016.