Export growth rate declined

[TamilNet, Monday, 03 May 1999, 20:20 GMT]
Sri Lanka's export growth rate declined from 13 percent in 1997 to 2 percent in 1998 said the country's Central Bank Governor A.S Jayawardana today while addressing a press conference in Colombo.

He said that while the growth rate for 1998 was 4.7, the budget deficit as a percentage of the Gross Domestic Product which was 7.9 in 1997 went up to 9.2 percent last year.

He said that higher security related expenditure (defence) and increase in the wage bill contributed mainly to this increase.

The CB governor also blamed transfers to loss making corporations, significant reduction in tax buoyancy due to tax concessions and less than optimal rate for the General Sales Tax.

Mr.Jayawardena said that the country's per capita income has increased from 814 USD to 837 USD and hence Sri Lanka is now classified as a lower middle income nation. This, however, will not get the country special aid it used to get when it was among the countries with the lowest income.

"It is not a happy situation that the inflation is at 7.3" (from 7.4 in 1997) the CB governor pointed out, saying that other countries are trying to keep it much lower.