Sri Lanka must lift investment rate above 30% for faster growth: Indian economist

Sri Lanka must actively explore avenues to raise its investment rate to above 30 percent, if it is to return to a growth trajectory of 6 percent to 7 percent, as the current level of around 20 percent is insufficient for rapid expansion, a top Indian economist said.

- By SHANNINE DANIEL

Dr. Montek Singh Ahluwalia, a senior economist and former chairman of India’s Planning Commission said the island nation faces a tougher global environment even as it works to resolve domestic economic challenges.

Drawing on data from the World Bank, Dr. Ahluwalia noted that Sri Lanka’s investment rate is around 20 percent, almost near the levels of the EU and the US at 21-22 percent.

However, as Dr. Ahluwalia pointed out, since Sri Lanka is still in its stage of post-economic crisis recovery and growth, the country has to fix its issues as well as face a world which is more difficult than it was in the past.