Home / TOP STORY/ 7% growth in 1H 2015, predicts CB Governor

7% growth in 1H 2015, predicts CB Governor

Comments / {{hitsCtrl.values.hits}} Views / Saturday, 6 June 2015 00:00



  • Says hopeful of reaching $ 4,000 per capita income mark by year end
  • Recovering agriculture will compensate for slowing construction industry 
  • Wants fresh focus on remittances including new data and payment methods from banks  


‘It’s all looking up’ seems to be the message by Central Bank Governor Arjuna Mahendran – Pic by Lasantha Kumara


By Charumini de Silva

Concurring with growth projections made by international monetary organisations, Central Bank Governor Arjuna Mahendran is confident Sri Lanka’s economy will average around 7% during the first half of 2015, with growth picking up in subsequent years.

“By the end of six months this year, we will average around 7%. There’s nothing to worry,” a confident Governor told the Daily FT.

“I think things are looking good. Once we hit $ 4,000 per capita, the economy will shoot up. I am hopeful that we reach that level by the end of this year, in which case we can look at 8% to 9% economic growth in the next five years,” he added.


Sri Lanka’s economic growth is expected to decline to 6.9% in 2015 due to slowing construction activity, according to the World Bank, which has also warned private sector sentiment would be cautious till economic policies of the new Government stabilise. The International Monetary Fund (IMF) earlier in the year gave a growth outlook of 6-7%, and the Asian Development Bank (ADB) a growth of 7%. The country grew by 7.4% in 2014. Further explaining economic factors, Mahendran said that the agriculture sector was recovering after the drought last year, which was a good indication. However, he noted the construction sector had slowed down, mainly because the new Government was reviewing some of the infrastructure projects. 


However, he pointed out that agriculture picking up and construction slowing down would balance out the difference. 

“That way I think it will keep the economy evenly balanced,” he said. 

Further clarifying his point, the Governor said private construction such as housing was booming. 

“Exports are doing well. Now that the rupee is down by 2% against the dollar, that will also help competitiveness and exports will continue to grow. Exports and FDIs are the two areas we need to improve on. Those are the two areas we are focusing on. The Minister of industry and Commerce has his plans in the export sector. The BOI is developing its plans for FDIs. With those two I think in the medium term we could go beyond 7.5%.”

Commenting on remittances, Mahendran said that the country received a record $ 7 billion last year and would continue to grow. “Remittances are the critical component that really saved the economy for the last 10 years during and after the war,” he added.

“We are like the Philippines and the Mexicans, which are countries with huge expatriate populations and that is a different kind of an economic model from other countries where they stay back home and grow their own industries. We have to factor that in,” he noted. 

“Being an expatriate myself, I’m very keen on giving more opportunity to grow their own economy. At the end of the day, we all love our country. We send the money earned to relatives, to invest or to build houses. So we must grow this channel,” he pointed out.

The Governor said he would continue to focus on the importance of banks establishing a system for expatriate workers to easily remit their funds. 

Citing an example, he said: “In Philippines if a housemaid is working in Dubai she can directly and easily remit money every month on her mobile phone to a property developer who is building an apartment. The same way we could setup a payment system where I could remit some money via my mobile to my Sri Lankan account or to a Sri Lankan property developer.”

With such easy schemes, the Governor expressed confidence Sri Lanka could attract foreign exchange. He added that discussions were ongoing with banks to set up similar systems.

“We are talking to the banks. We are working on some options and I’ll announce it in a few months,” he assured.

Mahendran also noted the Central Bank was attempting to conduct more detailed studies on the makeup of remittances, including regional and gender divisions, which would help in meeting specific market needs.  

“We know that 50% is from the Middle East and the rest from other parts of the world. But who are the type of people who are sending those remittances and what’s the proportion between housemaids and other professionals? For that sort of information, we actually have to send people out and do a survey or ask the local banks receiving remittances to give us some details. We are starting that study at the Economic Research Department,” he said.

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Come, let us build!

Friday, 26 April 2019

It was the best of times; it was the worst of times. Best because Sri Lanka was united in what it did well: being at peace, on an extended sabbatical, pursuing the absence of conflict – even mindlessly – and enjoying the fruit of island life. Wor

Black Easter

Friday, 26 April 2019

To Sri Lankan Christians, Easter this year was a day of God where demons reigned. It can be considered an unfortunate day in which the country was plunged again into the uncivilised wretchedness that prevailed in the country during the violent confli

Explaining Sri Lanka’s new Emergency Regulations on ‘publication’

Friday, 26 April 2019

Sri Lanka’s President issued a new set of Emergency Regulations on 22 April. This note explains the contents of Emergency Regulation 15, which concerns the ‘control of publications’, and certain other regulations relevant to publication. There

A secular public space is essential for the safety and wellbeing of all

Friday, 26 April 2019

The heart is heavy and the pen is slow. The environment is thick with the shared sorrow of many. Pain and suffering caused by deaths of hundreds and maiming of more on Easter of 2019 will linger for the rest of our lives. But life must go on and we m

Columnists More