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Sri Lanka targets low inflation, low poverty, high employment: CB Governor

Dec 06, 2010 (LBO) - Sri Lanka is hoping to bring down unemployment lower than the current 5.
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2 percent and keep inflation and interest rates low to bring down poverty with higher growth, Central Bank Governor Nivard Cabraal said.
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"Poverty to has been brought down to 7.6 percent which would have taken many poeple by surprise," Central Bank governor Nivard Cabraal told bankers at a forum in Colombo.

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"And now we need to ensure that next set of policies will bring down poverty further so that we can have fully inclusive growth in our nation."

"So the idea is in the next four to five years to bring poverty levels down to about three or four percent, which again is not something impossible."

Sri Lanka still has a dollar-a-day type of absolute poverty calculation, and does not yet use relative poverty benchmarks, though it is now ranking itself as a middle income country.

Since 2002 Sri Lanka's exchange rate has been stable, though inflation spiked to very high levels from 2004 to 2007 under a deficit spending, money printing economic framework with make-work state expansion.

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But monetary policy was tightened from 2007 and budgets have started to improve from 2010.

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Fiscal policy improved from 2010.
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