Fri, 14 May 2021 Today's Paper

SL'S public investments, FDIs lagging behind peers

22 May 2013 10:17 am - 0     - {{hitsCtrl.values.hits}}

A A A

Despite government investments in the economy increasing as a percentage of GDP as well as in absolute terms during 2012, the International Monetary Fund (IMF) points out that Sri Lanka’s public investment is low compared to countries that have experienced sustained high growth.

“Fiscal consolidation in the context of revenue weakness has resulted in low investment plans, and recent shortfalls relative to those plans,” IMF Staff stated in their country report.

Public investments increased by 28 percent to Rs.525 billion in 2012 improving its share of GDP to 6.9 percent from 6.3 percent in 2011. The government reiterated its stance on capping its share of total investments which peaked to 30.6 percent in 2012 to 6 percent of GDP to pave way for the private sector to play a leading role.

The government strives to achieve gross investments above 33 percent by 2016 in a US $ 100 billion economy.

Data compiled by IMF showed emerging Asia’s relatively strong government investment multipliers, indicating t hat increased infrastructure investment to remove bottlenecks and broaden growth is important if the authorities’ ambitious growth objectives are to be realized (Graph 1).

Meanwhile Foreign Direct Investment (FDI) inflows too remains anemic compared to the peers though authorities boast of attracting US $ 1,338 million, highest ever inflow for a year in 2012 (Graph 2).

 “Tax holidays and concessions have not delivered the expected increase in FDI inflows,” opined IMF, urging the authorities to reduce and revise tax holidays and exemptions, which have undermined revenues but failed to enhance FDIs.

IMF further pointed out that Capital account flows have been rather disappointing, as the large FDI inflows predicted at the end of the conflict are yet to materialize.

Meanwhile the Central Bank expects FDI inflows to improve over the medium term from the current level of 2.3 percent of GDP to 4 percent of GDP by 2016.

From total FDI inflows last year, US $ 305 million or 22 percent consisted of short-term capital to the Colombo Stock Exchange which has the risk of being pulled out.

A leading professional on Risk Management & Strategy, Felix Stephen pointed out at a recent forum of the significance of introducing instruments such as infrastructure bonds and facilitating investment in properties which could lock in FDIs for longer periods.
See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Indian Covid-19 variant added to WHO’s variants of concern : Prof. Neelika Malavige

Globally new cases of Covid are falling, after an all-time peak through March

MeGha Primal Intake: A mega scam by few govt doctors ?

Days after the Dhammika Paniya was rejected as a cure against COVID-19, news

DMK Chief M. K. Stalin Becomes Tamil Nadu Chief Minister

“Stalin Thaan Varraaru, Namakku Vidivu Tharraaru” (Stalin is only coming

Chemical Fertilizer Ban: A radical political decision that is not too practical?

Soil makes up as the home to millions of insects, microorganisms, recycle mat

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.