Annual Report 2012 - National Savings Bank

33HOW WE PERFORMED IN 2012ECONOMIC REVIEWThe World Remains ChallengedIt hasn’t exactly been the year wehoped would ensue. There were veryoptimistic predictions of an economicturnaround which would naturallycascade to countries performing betterat the beginning of 2012. But this wasnot to be. What did happen was that theworld continued to wallow in the depthsof its economic woes, while the US andthe Eurozone fought its own economicbattles. Recovery was excruciatinglyslow, if at all, but that’s not to say thatthe rest of the world did not feel itseffects.The Arab Spring continued to cascadeits fallout across the world, seenmost in the volatile oil prices, whilenatural disasters including oods, res,earthquakes and droughts stied growthacross continents and the ‘Chindianmasters’ India and China, whichsomehow did not remain clear of themorass unfolding, were hence forced tore-forecast growth targets. Meanwhile,Europe saw countries like Greece beingtipped for bankruptcy, while othersdesperately sought bailouts.The passing of the American TaxpayerRelief Act of 2012, on the 31st ofDecember 2012, saw an increase inrevenue and an incline in spendingprojected for the coming scal year.The optimistic feature is that therewill denitely be positive permeationacross Africa, Asia and Europe, as theUS continues to have signicant tradinginuence on these geographic areas.Developed economies continued to beharbingers of continuing problems,remaining at the core of the world’sworries. There was a renewed escalationin the Euro debt crisis and this wasreected in the meager growth seen inthe global economy, which was just 3%compared to 3.6% in 2011. Economistspredict a growth of 3.25% in 2013,as the world is now looking towardsemerging markets, such as India andChina, for growth leadership. It mustbe noted however, that these emergingmarkets are not yet cut away enoughfrom the world to stand independently,and thus remain vulnerable to theworld’s economic paradigms.Emerging economies are dependent ondeveloped economies for exports andthe fragile export demand was one ofthe reasons that saw a slowing growthin Emerging Asia. This prompted thebloc to introduce initiatives that wouldreduce trade dependence on the USand Europe, by encouraging greaterregional integration and intra regionaltrade. Hence, Emerging Asia did seea pick up in growth to 6.3% in 2012,which is believed to be bettered in 2013.Heralding Transformations in theSri Lankan EconomyThe path to progress has been etched,the map for development chartered; SriLanka is ready for the transformation.Three years after an end to one of themost debilitating chapters in Sri Lanka’shistory, peace dividends are clearlyvisible and the process of reconciliation,reconstruction and nation building isseeing fruition. The Ten Year NationalVision, the Mahinda Chinthana, ismeeting its targets, based on a strongclear foundation of ensuring that thiscountry becomes a US $100 BillionNATIONAL SAVINGS BANK . ANNUAL REPORT 2012