Mahinda Chintana has accelerated economic growth -Jayasundera
Dr. P.B. Jayasundera
The second five year strategy under the Mahinda Chintana development
framework has accelerated the economic growth towards 8 percent with a
reduction in poverty and income equality. The social indicators have
improved and the development strategies specifically targeted integrate
conflict affected areas with the rest of the economy, Treasury Secretary
Dr. P.B. Jayasundera said.
“The country is moving towards achieving the 10 year development plan
set out by the government. The country has been rated as a middle income
country for the eight consecutive year,” he said at the launch of the
Annual Report 2011 by the Ministry of Finance and Planning held
“New challenges have emerged. The country’s rising imports undermine
the sustainability of the Balance of Payments. A well- focused
development strategy to raise exports and reduce imports need to be in
place. New challenges in the areas of health and education include the
rising trend of non-communicable diseases and capacity constraints in
accommodating knowledge seekers within the state university system.
Inadequate savings is also a concern in the context of required
investments to sustain the growth rate in excess of 8 percent,” he said.
According to the report fiscal policy strategy of the government is
designed to generate a revenue surplus by adopting expenditure
management measures to economize operational expenditure and to improve
government revenue through broad-basing the revenue collection. The
government follows a rolling three year medium term plan to bring down
the fiscal deficit to about 5 percent and the public debt level to below
70 percent in relation to GDP. The protection of public investment at 6
percent of GDP and sustaining social spending on education, health,
rural development and welfare is the main thrust of this adjustment
strategy as it supports growth and poverty reduction.
Economic performance in 2011, being the first year of the second 5
year framework has produced encouraging results. Among the key outcomes
are economic growth which reached 8 percent in 2010 continued to 2011 on
a similar pace, private investment which declined to 17.9 percent of GDP
in 2009 increased to 21.4 percent in 2010 and 23.7 percent in 2011.
With this together with public investment, the country has realized a
total investment ratio of 30 percent well in line with the medium term
target of 35 percent to sustain high growth. Unemployment declined to
below 5 percent consistent with the sustained economic growth of around
6 percent during 2006 – 2009 and over 8 percent since then. The decline
in unemployment is associated with improved productivity in the labour
force, the report said.