Sri Lanka expects 6.0-pct growth in 2016, higher with China FDI: CB Governor
ECONOMYNEXT – Sri Lanka can generate 6.0 percent growth in 2016 even if private credit growth slows, and can expand around 7.0 percent if foreign direct investment from China adds to the momentum, Central Bank Governor Arjuna Mahendran said.
"Six percent is doable, that is our base case," Governor Mahendran told reporters. "A lot depends on FDI (foreign direct investments)."
He said Chinese investments could push growth to around 7.0 percent in 2016.
International Trade Minister Malik Samarawickreme is leaving for China in March and Prime Minister Ranil Wickremesinghe will follow in April, he said.
He said the China Port City in Colombo as well integration of Hambantota in to ‘large urban landcape’ will boost economic activity.
China has asked for a 1000 acre industrial park in Hambantota. A Chinese firm will also build a dry dock.
Under a plant to make Colombo into a nine million people metropolis, land in Colombo will also be opened for development, Mahendran said.
Deputy Central Bank Governor Nandalal Weerasinghe said Sri Lanka’s private credit growth topped 26 percent in 2016 and monetary tightening measures would slow credit.
In 2015, economic growth of 6 percent was forecasted on the basis of 12 percent growth in private credit he said.
Even if private credit falls to those levels in 2016, economic growth will register around 6.0 percent, he said. In 2015, the economy may have expanded around 5.8 to 6.0 percent, officials say.