Newly appointed Central Bank Governor Nivard Cabraal yesterday said a 5% growth for 2021 was likely to be a reality with the on-going vaccination drive, and mobility restrictions being relaxed.
He hinted on the growth number via what could be considered as the first tweet since assuming duties as the CB Governor last afternoon, and in response to the announcement of a second quarter GDP growth rate of 12.3% by the Department of Census and Statistics on Thursday 16
Prospects for a swift increase in non-debt generating inflows through international tourism and foreign direct investment (FDI), including the Government divesting assets to nonresidents,.
While the development of the Colombo Port City, new commercial agreements with the Government, and the privatisation or divestment of Government assets would yield foreign exchange inflows.
The Government recently reached an agreement with New Fortress Energy to invest in a liquefied natural gas terminal, which it expects will be operational by the second half of 2022.
Sri Lanka expects net FDI inflows to average $1 billion in 2021-22, compared to a peak of around $2.2 billion pre-pandemic in 2018.
However Sri Lanka's economy grew 12.3 percent year on year in the second quarter of 2021, the Department of Census and Statistics (DCS) announced.
The performance of the Sri Lankan economy during the second quarter of the year 2021, was at a satisfactory level, until the third wave came in late April when compared to the same quarter in the previous year," a statement by the DCS said.
The double-digit growth rate in the second quarter was due to a low base of a 16.4 percent contraction in the same period last year due to the COVID-19 pandemic and accompanying lockdowns.
Sri Lanka's gross domestic product (GDP) at constant prices in the second quarter stood at 2.2 trillion rupees (10.8 billion U.S. dollars).
The DCS data showed that this figure is lower than the GDP for the same period in 2018 and 2019, indicating that output has not yet reached pre-pandemic levels.
The industrial sector recorded the fastest growth of 22.1 percent, while agriculture and services grew 8.1 percent and 7.5 percent respectively.
Services contributed to 57.9 percent of GDP, while agriculture and industry contributed to 9.2 percent and 27 percent respectively.