The Growth Deficit: The Competitiveness/Productivity Challenge : Beyond a Remittance Dependent Economy

The growth momentum in the Sri Lankan economy has slowed down significantly. It is important to examine its performance subsequent to the necessary stabilization measures introduced in Feb/March 2012 to address the overheating of the economy. This was reflected in the severe balance of payments/reserves and inflationary pressures at that time. Trends in indicators that are often used as proxies for growth, such as electricity consumption, shipments (total cargo handled minus transhipment) and cement consumption (domestic production plus imports) seem to point to growth of less than 5% in 2H 2012 i.e. the period when the stabilization measures would have taken effect.