Annual Report 2010 - Ministry of Finance and Planning

1 | DEVELOPMENT PERSPECTIVESDomestic savings in 2010 hasimproved to 18.7 percent of GDP in2010 from 17.9 percent of GDP in2009. Meanwhile, national savings,the sum of domestic savings, netforeign private transfers and netfactor income from abroad, wereestimated at Rs. 1381 billion in 2010recording an improvement of 20.3percent over the previous year.The national savings ratio (nationalsavings/GDP) slightly rose to24.7 percent of GDP in 2010 from23.7 percent in 2009 due to thedecrease in net factor paymentsabroad and lower growth in netprivate transfers from abroad. Theimprovement in national savings canalso be attributed to the favourableperformance of both net factorincomes from abroad and netprivate transfers. Net private currenttransfers, which consist of workerremittances has increased to Rs 465billion in 2010 from Rs. 337 billion in2009.The domestic savings-investmentgap as per GDP increased from 6.5percent in 2009 to 9.1 percent in2010. The recovery in total investmentresulted in widening the nationalsavings and investment gap to 3.1percent of GDP, which was reflectedin a higher deficit in the externalcurrent account.Unlike past decades, now theinvestment climate for private sectorin Sri Lanka is rapidly improving inorder to increase the investmentto over 30 percent of GDP andefficiency gains in investment andproduction from both the public andprivate sectors.% of GDP35302520151050-5-10-15-20Chart 1.72 > Savings Investments Gap2005 2006 2007 2008 2009 2010Investment Savings Saving Investment GapTable 1.73 > Savings and Investment 2009 and 2010ItemRs. Billion Growth RateAs aPercentage ofGDP2009 2010 2009 2010 2009 2010Domestic Investment 1,181.4 1,556.8 -2.8 31.8 24.4 27.8Private 863.5 1,209.6 -7.1 40.1 17.9 21.6Government 318 347.2 11.1 9.2 6.6 6.2Domestic Savings 867.5 1,045 41.8 20.5 17.9 18.7Private 1,047.5 1,163.8 49.6 11.1 21.7 20.7Government -179.9 -118.9 -103.3 33.9 -3.7 -2.1Domestic Savings- -313.9 -511.8 - - -6.5 -9.1Investment GapNational Savings- -33.1 -175.7 - - -0.7 -3.1Investment GapNet Factor Income -55.8 -71.9 46.9 28.8 -1.2 -1.3from AbroadNet Foreign Private 336.6 408 21.2 21.2 7.0 7.3TransfersNational Savings 1,148.3 1,381.1 46.4 20.3 23.7 24.7134