Sunday, August 29, 2010
Percapita income over $ 2000 according to IMF-- Sri Lanka reached middle income economy status country now.
An extract of the 60th Anniversary Oration of the Central Bank delivered by Treasury Secretary Dr P B Jayasundera on August 27 at the Centre for Banking Studies
In 1990, the Sri Lankan economy with a per capita income of US $ 400 was a less developed economy. The economy performed in the midst of an islandwide insurgency in the South and a prolonged conflict in the North. The economy was trapped in a power crisis and in a severe capacity constraint in the available infrastructure, particularly a road network and telecommunication facilities.
Seriously in 1990 Sri Lanka witnessed an annual average inflation of 21.5 percent and a monetary expansion of 15 percent. The gross official assets of the economy were US $ 435 million in comparison to the country’s total current account deficit of US $ 580 million. External debt to GDP was 55 percent and external debt service had reached 20 percent. Budget deficit had been near 10 percent of GDP with the adjustment burden regrettably falling on public investments which had declined form 18 percent of GDP in 1980 to seven percent of GDP in 1990.
Treasury Secretary Dr P B Jayasundera speaking at the event. Picture by Chaminda Hitthetiya
Reflecting the impact of successive high fiscal deficits, weakening of the exchange rate and a low economic growth, the level of Government debt in relation to GDP had reached near 100 percent. The rate of unemployment was 15.9 percent and households living below the poverty line were in excess of 25 percent. Economic policies of the 1980s and 1990s were very much influenced by multi lateral lending agencies and reforms based on privatization and liberalization, placing trust only on the private sector for economic development.
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