Sri Lanka needs to increase the current savings rate from 23% to 30% of GDP by 2020 and get close to India or Thailand, said Aswin De Silva, Chairman National Savings Bank.
“We as a responsible government owned institution will always look at ways and means of improving the financial and social inclusion of this country,” he opined speaking at the ‘NSB Reach’ launch event held in Colombo on Tuesday.
De Silva said Sri Lanka’s savings rate is at 23% of the GDP. In India and Thailand the rate is 31%. In Malaysia it stands as 33% and Singapore 53%. Sri Lanka was behind of all these neighboring countries. And when looking at the last five years it has been a minus growth. “We have been flat or come down marginally. Whereas countries like India, Japan and Singapore, the savings rate has increased. I think a reversal is required, “ he cautioned.
The Chairman acknowledged that they were responsible for this reversal as people responsible of managing the institution. “We need to make every effort to reverse it. We need to reverse it because all international global institutions including the World Bank and IMF has said that there is a correlation between a country’s development, growth and the rate of the savings. Higher the savings is greater ability for a country to sustain its growth. So we need to do that,” De Silva insisted.
The Chairman said the country needs to increase the current saving from 23% to 30% by 2020 and get close to India or Thailand. To achieve this the country should increase the savings rate roughly by 2% a year. An increase of 2% for four years will make up to about 30%. That will provide an additional saving close to about Rs 500 billion every year.
“Our GDP is about US$ 78 billion. Rs 500 billion additional savings every year is a tall order, a difficult task. But if we put all our efforts into it, that is not an impossibility. If we can reach that 30%, I am sure it would be a better place for all of us to live. We are responsible for that. We will make every endeavour to reverse this trend and get us to 30%. That is the reason we launch programmes of this nature,” the Chairman added.
http://www.dailynews.lk/?q=2016/09/01/business/91986
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