CENTRAL BANK OF SRI LANKA
ANNUAL REPORT
OF THE MONETARY BOARD TO THEHON. MINISTER OF FINANCE
FOR THE YEAR
2012
http://www.kvisoft.com/pdf-merger/
ISBN 978-955-575-260-2
ISSN 1391-359X
Price per copy
Counter sales Rs. 400 per copy
Despatch by ordinary mail Rs. 670 per copy
Despatch by registered mail Rs. 695 per copy
Despatch abroad
Air mail (1st Class) US $ 40 per copy (Registered post)
Air mail (2nd Class) US $ 35 per copy (Registered post)
Sea mail US $ 25 per copy (Registered post)
Printed at Sharp Graphic House (Pvt.) Ltd. , No47, Old Kottawa Road, Pannipitiya, and published by the
Central Bank of Sri Lanka, 30, Janadhipathi Mawatha, Colombo, 00100.
Ajith Nivard CabraalThe Governor
Central Bank of Sri Lanka30, Janadhipathi Mawatha
Colombo 01, Sri Lanka.
March 28, 2013
His Excellency Mahinda RajapaksaPresident of Sri Lanka andMinister of Finance and PlanningPresidential SecretariatColombo 01.
Your Excellency,
Annual Report 2012
Section 35 of the Monetary Law Act (Chapter 422) requires the Monetary Board of the Central Bank of Sri Lanka to submit an Annual Report to the Minister of Finance on the state of the economy, the condition of the Central Bank and a review of the policies and measures adopted by the Monetary Board, within four months after the end of each financial year.
The Sixty Third Annual Report of the Monetary Board of the Central Bank, in respect of the year 2012, is submitted herewith in fulfilment of this obligation.
Yours sincerely,
CENTRAL BANK OF SRI LANKA
THE MONETARY BOARD(As at 31 December 2012)
AJITH NIVARD CABRAALGovernor
P. B. JAYASUNDERASecretary to the Ministry of Finance and Planning
MRS. M. RAMANATHANAppointed Member
NIMAL WELGAMAAppointed Member
N. A. UMAGILIYAAppointed Member
PRINCIPAL OFFICERS AS AT 31 December 2012
Deputy Governors
B. D. W. ANANDA SILVA P. NANDALAL WEERASINGHE
MRS. CHANDRA PREMARATNE
Assistant Governors
P. SAMARASIRI (Secretary to the Monetary Board)
W. M. KARUNARATNE
MRS. J. P. MAMPITIYA
W. M. HEMACHANDRA
S. LANKATHILAKE
C. J. P. SIRIWARDENA
MRS. R. DHEERASINGHE
A. KAMALASIRI
K. D. RANASINGHE (On Release)
S. S. RATNAYAKE
DEPARTMENTAL HEADS
Bank Supervision DepartmentMRS. T. M. J. Y. P. FERNANDO - Director
S. K. RANASINGHE - Additional Director
Centre for Banking StudiesC. P. A. KARUNATILAKE - Director
T. D. H. KARUNARATNE - Additional Director
Communications DepartmentS. J. A. HANDAGAMA - Director
Currency DepartmentJ. P. R. KARUNARATNE - Superintendent
MRS. H. P. T. WIJESURIYA - Additional Superintendent
MISS. S. H. GUNAWARDENA - Additional Superintendent
Domestic Operations DepartmentR. A. A. JAYALATH - DirectorD. A. G. K. WIJETUNGA - Additional Director
Economic Research DepartmentMRS. S. GUNARATNE - DirectorMRS. Y. M. INDRARATNE - Additional DirectorD. KUMARATUNGE - Additional Director
Employees Provident Fund DepartmentMRS. K. GUNATILAKE - SuperintendentMRS. C. M. D. N. K. SENEVIRATNE - Additional SuperintendentL. D. D. Y. PERERA - Additional Superintendent
Exchange Control DepartmentP. H. O. CHANDRAWANSA - Controller
R. R. JAYARATNE - Additional Controller
Finance Department M. I. SUFIYAN - Chief Accountant
P. V. L. NANDASIRI - Additional Chief Accountant
Financial Intelligence UnitD. M. RUPASINGHE - Director
D. K. WIJESURIYA - Additional Director
Financial Stability Studies Department MRS. K. M. A. N. DAULAGALA - Director
H. P. G. S. RATNASIRI - Additional Director
Governors Secretariat DepartmentMRS. K. DASSANAYAKE - Director
T. M. Z. MUTALIPH - Additional Director
Human Resources DepartmentA. R. K. WIJESEKERA - Director
W. R. A. DHARMARATNE - Additional Director
Information Technology DepartmentMRS. R. A. S. M. DAYARATNE - Director
C. B. PATHBERIYA - Additional Director
International Operations DepartmentH. A. KARUNARATNE - DirectorA. A. M. THASSIM - Additional DirectorC. N. WIJAYASEKERA - Additional Director
Management Audit DepartmentA. M. N. GUNAWARDANA - Director
Payments and Settlements DepartmentMRS. R. B. WEERASINGHE - Director
A. J. L. PEIRIS - Additional Director
Policy Review and Monitoring DepartmentP. W. D. N. R. RODRIGO - Director
V. BASKARAN - Additional Director
Facilities Management DepartmentU. H. E. SILVA - Director
H. SRIYARATNE - Additional Director
Provincial Offices Monitoring DepartmentH. AMARATHUNGA - Director
Public Debt DepartmentN. W. G. R. D. NANAYAKKARA - Superintendent and Registrar
MRS. U. L. MUTHUGALA - Additional Superintendent
Regional Development DepartmentM. J. S. ABEYSINGHE - Director
M. S. K. DHARMAWARDANE - Additional Director
A. M. R. K. ATTANAYAKE - Additional Director
Secretariat DepartmentD. WASANTHA - Secretary
B. W. JINASENA - Additional Secretary
Security Services DepartmentS. WANIGASEKERA - Director
B. L. J. S. BALASOORIYA - Additional Director (On Study Leave)
Statistics DepartmentMISS. K. SARAVANAMUTTU - Director
T. H. B. SARATHCHANDRA - Additional Director
Supervision of Non-Bank Financial Institutions DepartmentH. M. EKANAYAKE - Director
H. B. D. KARUNARATNA - Additional Director
MRS. N. H. E. R. SIRIWARDHANA - Additional Director
Welfare DepartmentE. A. HETTIARACHCHI - Director
T. W. ARIYARATNE - Additional Director
AUDITOR
H. A. S. SAMARAWEERA
Auditor-General
CONTENTS
PART I
Page
1. ECONOMIC, PRICE AND FINANCIAL SYSTEM STABILITY, OUTLOOK AND POLICIES
1.1 Overview 1 1.2 Macroeconomic Developments, Stability and Policy Responses in 2012 7 Real Sector Developments ... 7 External Sector Developments ... 13 Fiscal Sector Developments ... 17 Monetary Sector Developments ... 19 Financial Sector Developments ... 211.3 Global Economic Environment and Outlook 231.4 Medium Term Macroeconomic Outlook 26
2. NATIONAL OUTPUT AND EXPENDITURE
2.1 Overview 37 2.2 Sectoral Output, Policies, Institutional Support and Issues 38 Agriculture 38 Export Agriculture 40 Domestic Agriculture 42 Fishing 44 Livestock 45 Forestry 46 Agricultural Policies and Institutional Support 46 Industry 49 Mining and Quarrying 49 Manufacturing 50 Processing 50 Factory Industry 50 Industry Policies and Institutional Support 53 Cottage Industry 57 Electricity, Gas and Water 57 Construction 57 Services 58 Wholesale and Retail Trade 58 Hotels and Restaurants 59 Transport and Communication 59 Banking, Insurance and Real Estate 60 Government Services 61 Private Services 61 2.3 Expenditure 61 Consumption 61 Investment 63 Availability and Utilisation of Resources 65 Savings 66
3. ECONOMIC AND SOCIAL INFRASTRUCTURE
3.1 Overview 673.2 Economic Infrastructure Policies, Institutional Framework and Performance 69 Communication Services 69 Energy 73 Electricity 74 Petroleum 76 Oil Exploration ... ... ... 78 Transportation 79
Page
Road Development ... 79
Road Passenger Transportation ... ... ... 80
Railway Transportation 81
Civil Aviation 83 Port Services ... 84 Water Supply and Irrigation 853.3 Social Infrastructure Policies, Institutional Framework and Performance 87 Health 87 Education 89 Housing and Urban Development 91 Safety Nets and Poverty Alleviation 92 Environment 93 4. PRICES, WAGES, EMPLOYMENT AND PRODUCTIVITY
4.1 Overview ... 974.2 Prices 98 Price Movements and Contributory Factors 98 Colombo Consumers Price Index (CCPI) 98 Wholesale Prices Index (WPI) 102 GDP Deflator 1034.3 Wages 103 Public Sector Wages 104 Formal Private Sector Wages 104 Informal Private Sector Wages 1054.4 Population, Labour Force and Employment 106 Population 106 Labour Force 107 Employment 110 Unemployment 111 Foreign Employment 112 Labour Productivity 113 Labour Relations 116 Labour Market Reforms 117
5. EXTERNAL SECTOR DEVELOPMENTS AND POLICIES
5.1 Overview 1195.2 External Trade Policies and Institutional Support 1225.3 Trade in Goods, Trade Balance, Terms of Trade and Direction of Trade 124 Export Performance 124 Import Performance 126 Trade Balance 129 Terms of Trade 129 Direction of Trade 1305.4 Trade in Services, Income, Current Transfers and Current Account Balance 131 Trade in Services 131 Transportation Services 131 Travel and Tourism 132 Communication and Computer and Information Services 134 Inflows and Outflows of Income 135 Current Transfers 135 Current Account Balance 1365.5 Capital and Financial Flows and Balance of Payments 136 Foreign Direct Investment
