Harsha calls for achievable 2013 monetary targets

United National Party (UNP) MP Dr. Harsha de Silva has called for a realistic Monetary Policy Road Map for the year 2013 (that is to be presented today), as opposed to an unrealistic and unsustainable one presented last year.

“The Monetary policy road map unveiled last year was unrealistic and unsustainable which is why they decided to completely change the entire plan within one month of its unveiling. It was pointed out by me at that time of unveiling that it was a horribly one-sided propaganda attempt by the Central Bank Governor which proved to be right.

This year I urge the governor to focus on presenting a comprehensive policy which is in reality achievable and sustainable,” the MP said.

Speaking to the Daily Mirror subsequent to a statement issued by the economist turned legislator, Dr. De Silva said that it didn’t take the Central Bank authorities much time to figure out that something was wrong with the map.

“The important point is that I believe the Central Bank was fully aware of the reality but the Governor opted to paint an illusion in the road map presentation assuming things would change for the better. That is why I was so critical of it,” the MP further said.

In his statement he pointed out key contradictions comprised in the initial road map.

“Some of the key predictions for 2012 were that of 8.0 percent GDP growth and per capita income of USD 3,129. We will be nowhere near that. I would be surprised if we reach 6.5 percent growth and USD 3,000 per capita. Inflation was estimated at 5.5 percent, but that too is way off the mark with the price level rising at over 9 percent per annum at present.

Even with the overvalued currency, the Bank estimated exports to increase to USD 12.5 billion, but even after the massive depreciation, exports won’t hit USD 10 billion for 2012. Another huge overestimation was on foreign direct investments. The 2012 estimate was USD 2 billion. The reality is FDIs may not even cross USD 1 billion with none of the big projects listed including Sun City and Sheraton not happening while the proposed petrochemical, cement, fertilizer and sugar plants at Hambantota also still on the boards if at all. Then on the stock market the Governor said we would see a net inflow of USD 500 million but the reality is it will only be around USD 300 million at most with the confidence in CSE having being eroded with allegations of market manipulation by the so called stock market mafia,” the statement said.