1 preliminary

CENTRAL BANK OF SRI LANKA

ANNUAL REPORT

OF THE MONETARY BOARD TO THEHON. MINISTER OF FINANCE

FOR THE YEAR

2012

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 HEADSBank Supervision DepartmentMRS. T. M. J. Y. P. FERNANDO - DirectorS. K. RANASINGHE - Additional Director

Centre for Banking StudiesC. P. A. KARUNATILAKE - DirectorT. D. H. KARUNARATNE - Additional Director

Communications DepartmentS. J. A. HANDAGAMA - Director

Currency DepartmentJ. P. R. KARUNARATNE - SuperintendentMRS. H. P. T. WIJESURIYA - Additional SuperintendentMISS. 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 - ControllerR. R. JAYARATNE - Additional Controller

Finance Department M. I. SUFIYAN - Chief AccountantP. V. L. NANDASIRI - Additional Chief Accountant

Financial Intelligence UnitD. M. RUPASINGHE - DirectorD. K. WIJESURIYA - Additional Director

Financial Stability Studies Department MRS. K. M. A. N. DAULAGALA - DirectorH. P. G. S. RATNASIRI - Additional Director

Governors Secretariat DepartmentMRS. K. DASSANAYAKE - Director T. M. Z. MUTALIPH - Additional Director

Human Resources DepartmentA. R. K. WIJESEKERA - DirectorW. R. A. DHARMARATNE - Additional Director

Information Technology DepartmentMRS. R. A. S. M. DAYARATNE - DirectorC. 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 - DirectorA. J. L. PEIRIS - Additional Director

Policy Review and Monitoring DepartmentP. W. D. N. R. RODRIGO - DirectorV. BASKARAN - Additional Director

Facilities Management DepartmentU. H. E. SILVA - DirectorH. SRIYARATNE - Additional Director

Provincial Offices Monitoring DepartmentH. AMARATHUNGA - Director

Public Debt DepartmentN. W. G. R. D. NANAYAKKARA - Superintendent and RegistrarMRS. U. L. MUTHUGALA - Additional Superintendent

Regional Development DepartmentM. J. S. ABEYSINGHE - DirectorM. S. K. DHARMAWARDANE - Additional DirectorA. M. R. K. ATTANAYAKE - Additional Director

Secretariat DepartmentD. WASANTHA - SecretaryB. W. JINASENA - Additional Secretary

Security Services DepartmentS. WANIGASEKERA - DirectorB. L. J. S. BALASOORIYA - Additional Director (On Study Leave)

Statistics DepartmentMISS. K. SARAVANAMUTTU - DirectorT. H. B. SARATHCHANDRA - Additional Director

Supervision of Non-Bank Financial Institutions DepartmentH. M. EKANAYAKE - DirectorH. B. D. KARUNARATNA - Additional DirectorMRS. N. H. E. R. SIRIWARDHANA - Additional Director

Welfare DepartmentE. A. HETTIARACHCHI - DirectorT. W. ARIYARATNE - Additional Director

AUDITOR

H. A. S. SAMARAWEERAAuditor-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 136 Medium and Long-term Capital Flows to the Government 137 Investment in Government Securities 137 Long-term Capital Flows to the Private Sector and State-Owned Enterprises 138 Short-term Capital to the Private Sector and Public Corporations 138 Commercial Banks 138 Balance of Payments 138 International Reserves 139

6 Sovereign Ratings, External Debt and Debt Servicing 140

Sovereign Ratings 140 External Debt 143 Foreign Debt Service Payments 1445.7 Exchange Rate Policy and Exchange Rate Movements 145 Nominal and Real Effective Exchange Rates 146 Developments in the Domestic Foreign Exchange Markets 147

6. FISCAL POLICY AND GOVERNMENT FINANCE

6.1 Overview 1496.2 Fiscal Policy Direction and Measures 1506.3 Government Budgetary Operations 154 Revenue and Grants 154 Revenue 154 Grants 157 Expenditure and Net Lending 157 Financing the Budget Deficit 1616.4 Government Debt and Debt Service Payments 163 Government Debt 163 Debt Service Payments 1666.5 Budgetary Operations in Sub National Governments ... 167 Policy Direction and Measures of Sub National Governments 167 Budgetary Operations in Provincial Councils 168 Consolidated General Government Budgetary Operations 169

7. MONETARY POLICY, MONEY, CREDIT AND INTEREST RATES

7.1 Overview 171 7.2 Monetary Policy 1727.3 Developments in Money and Credit 174 Money Market Liquidity 174 Reserve Money 175 Narrow Money (M1) 177 Broad Money (M2b) 177 Broad Money (M4) 1817.4 Interest Rates 182 Money Market Rates 182 Deposit and Lending Rates 183 Yield Rates on Government Securities 185 Yield Rates on Corporate Debt Securities 1857.5 Future Developments, Challenges and Outlook 186

8. FINANCIAL SECTOR PERFORMANCE AND SYSTEM STABILITY

8.1 Overview 187 8.2 Performance of Financial Institutions 189 Banking Sector 189 Business Expansion 189 Assets and Liabilities 189 Risk Management 190 Resources 195

Non-Bank Financial Institutions Sector 196 Business Expansion 197 Assets and Liabilities 197 Risk Management 198 Resources 199 Primary Dealers in Government Securities 202 Risk Management 202 Market Participation 203 Unit Trusts 203 Insurance Companies 204

Page

Superannution Funds 2068.3 Performance of Financial Markets 207 Money Market 207 Domestic Foreign Exchange Market 208 Government Securities Market 208 Corporate Debt Securities Market 209 Commercial Paper 209 Corporate Bonds 210 Equity Market 2108.4 Development Finance and Access to Finance 2128.5 Financial Infrastructure Payment and Settlement Systems 213 Credit Information 217

PART II

ACCOUNTS AND OPERATIONS OF THE CENTRAL BANK OF SRI LANKA 1-94

PART III

MAJOR ADMINISTRATIVE MEASURES ADOPTED BY THE MONETARY BOARD IN 2012 1-92

PART IV

MAJOR LEGISLATIVE ENACTMENTS OF 2012 RELATING TO THE FUNCTIONS ANDOPERATIONS OF THE CENTRAL BANK AND BANKING INSTITUTIONS IN SRI LANKA 1-32

STATISTICAL APPENDIX

SPECIAL STATISTICAL APPENDIX

PART I TABLES

Page


1.1 Gross National Product by Industrial Origin at Constant (2002) Prices 8

1.2 Aggregate Demand and Savings Investment Gap 10

1.3 External Sector Developments 14

1.4 Global Economic Developments and Outlook 24

1.5 Medium-term Macroeconomic Framework ... 27


2.1 Sectoral Composition and Increase in Gross Domestic Product

by Industrial Origin at Constant (2002) Prices 38

2.2 Agriculture Production Index (2007-2010=100) 40

2.3 Trends in Principal Agricultural Crops 41

2.4 Paddy Sector Statistics 43

2.5 Fish Production 45

2.6 Livestock Sector Statistics 45

2.7 Industrial Production Index (IPI) 50

2.8 Aggregate Demand 62

2.9 Composition of Private Consumption Expenditure at Current Market Prices 63

2.10 Investment and Employment in Enterprises Registered under Board of

Investment of Sri Lanka (BOI) and Ministry of Industry and Commerce (MIC) ... 64

2.11 Total Resources and Their Uses at Current Market Prices ... 65

2.12 Consumption, Investment and Savings at Current Market Prices ... 66


3.1 Government Investment in Infrastructure .... 68

3.2 Growth of Telecommunications and Postal Services ... 69

3.3 Power Sector Performance ... 74

3.4 Petroleum Sector Performance ... 77

3.5 Salient Features of the Transport Sector ... 82

3.6 Performance of Port Services ... 84

3.7 Water Supply by National Water Supply and Drainage Board 86

3.8 Salient Features of Health Services ... 88

3.9 Salient Features of General and University Education . ... 90

3.10 Samurdhi Welfare Programme - Number of Beneficiary Families

and Value of Grants ... 93

4. PRICES, WAGES, EMPLOYMENT AND PRODUCTIVITY

4.1 Changes in Price Indices ... 99

4.2 Retail Prices of Key Imported and Domestically Produced Items 100

4.3 Revisions to Key Items with Administered Prices 2010-2012 ... 101

4.4 Sectoral Deflators and GDP Deflator ... 103

4.5 Wage Rate Indices ... 104

4.6 Informal Private Sector Daily Wages by Sector and Gender ... 105

4.7 District-wise Population and Density ... 106

4.8 Household Population, Labour Force and Labour Force Participation 107

4.9 Employment by Economic Activity ... 110

10 Status of Employment ... 110

4.11 Public Sector Employment ... 111

4.12 Unemployment Rate (Unemployed as a percentage of Labour Force) 111

4.13 Departures for Foreign Employment ... 112

4.14 Foreign Employment Departures by Destination ... 113

4.15 Labour Productivity by Major Economic Sector ... 115

4.16 Strikes in Private Sector Industries ... 116


5.1 Balance of Payments Analytical Presentation 121

5.2 Composition of Exports 125

5.3 Composition of Imports 127

5.4 Volume of Major Imports 128

5.5 Trade Indices 129

5.6 Net Services, Income and Current Transfers 132

5.7 Tourism Performance 133

5.8 Major Projects Financed with Foreign Borrowings during 2012 137

5.9 International Reserves of Sri Lanka 139

5.10 Disbursement Details of the IMF-SBA Facility 2009 140

5.11 Sri Lankas Sovereign Credit Rating and Country Outlook 140

5.12 Outstanding External Debt and Banking Sector External Liabilities 144

5.13 External Debt Service Payments 145

5.14 Exchange Rate Movements 146


6.1 Summary of Government Fiscal Operations 151

6.2 Economic Classification of Revenue 155

6.3 Economic Classification of Expenditure and Lending Minus Repayments 158

6.4 Functional Classification of Expenditure 160

6.5 Sources of Domestic Financing 162

6.6 Outstanding Government Debt (as at end year) 164

6.7 Assessment of External Debt Vulnerability of Sri Lanka - 2012 165

6.8 Government Debt Service Payments 166

6.9 Government Debt Indicators 167

6.10 Budget Outturn for Provincial Councils 168


7.1 Recent Monetary Policy Measures 2010-2012 1737.2 Developments in Monetary Aggregates 1767.3 Sources of Reserve Money and Broad Money (M2b) 1777.4 Classification of Loans and Advances granted by Commercial Banks 1797.5 Maturity Analysis of Outstanding Credit to the Private Sector by Commercial Banks 1807.6 Sources of Broad Money (M4) 1817.7 Selected Money Market Rates 1837.8 Deposit and Lending Rates 184 7.9 Yield Rates on Government Securities 185


8.1 Total Assets of the Major Financial Institutions ... 188

8.2 Distribution of Banks and Bank Branches ... ... 189

8.3 Composition of Assets and Liabilities of the Banking Sector ... ... 190

4 Composition of Statutory Liquid Assets of the Banking Sector ... 194

8.5 Profit of the Banking Sector ... 195

8.6 Composition of Regulatory Capital of the Banking Sector ... 195

8.7 Distribution of Branches of NBFIs by Province 197

8.8 Composition of Assets and Liabilities of the NBFI Sector ... 198

8.9 Composition of Income and Expences of the NBFI Sector ... ... 199

8.10 Composition of Regulatory Capital of the NBFI Sector ... 199

8.11 Performance of Primary Dealers ... 202

8.12 Performance of the Unit Trust Sector ... 203

8.13 Performance of the Insurance Sector ... 204

8.14 Performance of EPF and ETF ... ... 206

8.15 Money Market Transactions ... ... 207

8.16 Market Yield Rates of Government Security ... ... 209

8.17 Performance of the Share Market ... ... 210

8.18 Transactions through Payment Systems ... ... 214

PART I CHARTS

Page


1.1 Annual Real GDP Growth Rate (1978-2012) ... 2

1.2 Year-on-year Inflation (Based on CCPI, Spliced) ... 2

1.3 Annual Unemployment Rate (1990-2012) ... 7

1.4 Savings and Investment (as a Percentage of GDP) ... 10

1.5 Year-on-year Inflation (Based on CCPI: 2006/07=100) ... 11

1.6 Balance of Payments ... 13

1.7 Revenue, Expenditure and Overall Fiscal Deficit (as a percentage of GDP) ... 17

1.8 Government Debt (as a percentage of GDP) 18

1.9 Policy Interest Rate Corridor and Selected Market Interest Rates ... ... 19

1.10 Year-on-year Growth of Money and Credit to Private Sector ... ... 20


2.1 Annual Growth Rate ... 39

2.2 Rice: Supply and Demand ... 42

2.3 Industrial Production Index ... 51

2.4 Composition of Industrial Production - 2012 ... 52

2.5 Investment in Approved and Contracted BOI Projects (Including Projects Expanded) ... 64

Number of Projects ... 64

Value of Investment ... 64

2.6 The Economy in 2012 (at current prices) ... 65

Supply of Goods and Services 65

Demand for Goods and Services 65


3.1 Telephone Density ... 69

3.2 Average Tariff and Cost of Electricity ... 75

3.3 International Crude Oil (Brent) Prices (Monthly Average) 2011/2012 ... 76

3.4 Volume of Container Handling and Transshipments ... 84

3.5 Government Expenditure on Health and Education ... 87 3.6 Number of Samurdhi Beneficiary Families and Expenditure ... 93

4. PRICES, WAGES, EMPLOYMENT AND PRODUCTIVITY

4.1 Colombo Consumers Price Index (2006/07=100) ... 98

4.2 Trends in Labour Force and Unemployment 20082012 ... 111


5.1 Balance of Payments 120

5.2 Major Sources of Foreign Exchange Earnings 120

5.3 Exports by Commodities - 2012 124

5.4 Imports by Commodities - 2012 127

5.5 Exports, Imports and the Trade Balance 128

5.6 Terms of Trade and Trade Indices 130

5.7 Exports by Destinations 131

5.8 Imports by Origin 131

5.9 Tourist Arrivals in 2012 by Country 133

5.10 Tourist Arrivals and Earnings From Tourism 134

11 Inflows to the Capital and Financial Account 136

5.12 Quarterly International Reserves (Incuding ACU balances) 139

5.13 External Debt ... 143

5.14 Exchange Rate Movements ... 146

Exchange Rate Movement - Rupees per US $ 146

Effective Exchange Rate Indices: 24-currency (2010=100) 146

5.15 Quarterly Inter-Bank Forward Transaction Volumes 147


6.1 Major Fiscal Indicators (as a percentage of GDP) 150

6.2 Composition of Government Revenue 2012 154

6.3 Composition of Government Current Expenditure 2012 157

6.4 Total Expenditure by Function 2012 159

6.5 Deficit Financing (as a percentage of GDP) 162

6.6 Sources of Bank Financing 162

6.7 Outstanding Government Debt 164

6.8 Composition of Outstanding Domestic Debt - 2012 165

6.9 Composition of Outstanding Foreign Debt - 2012 165

6.10 Currency Composition of Total Outstanding Debt - 2012 166

6.11 Government Debt Service Payments (as a percentage of GDP) 167


7.1 Policy Interest Rate Cycles 172

7.2 Overnight Rupee Liquidity in the Domestic Money Market (2011-2012) 175

7.3 Year-on-Year Growth of Monetary Aggregates 176

7.4 Annual Increase in Domestic Credit (2000-2012) 178

7.5 Volume and Growth of Loans and Advances granted to the

Private Sector by Commercial Banks 178

7.6 Year-on-Year Growth of Outstanding Credit to Key Sectors (%) 179

7.7 Year-on-Year Growth of Credit Extended to the Private Sector 181

7.8 Year-on-Year Growth of Savings and Time Deposits 182

7.9 Average Weighted Call Money Rate and Policy Interest Rates 182

7.10 Movement of Selected Market Interest Rates 183

7.11 Average Weighted Lending Rates by Type of Security (%) 184

7.12 Secondary Market Yield Curve for Government Securities 185


8.1 Off Balance Sheet Exposure of the Banking Sector ... ... 190

8.2 Non-Performing Loans of the Banking Sector ... ... 190

8.3 Provisions for NPLs of the Banking Sector 193

8.4 Sector-wise Credit Exposure of the Banking Sector 193

8.5 Liquidity Ratios of the Banking Sector 194

8.6 Cumulative Maturity Gap-% of Cumulative Liabilities of the Banking Sector 194

8.7 Profitability Indicators of the Banking Sector 195

8.8 Capital Adequacy Ratios of the Banking Sector 196

8.9 Product-wise Accommodations of the NBFI Sector 197

8.10 Non-Performing Accommodations and Provisions Coverage of the NBFI Sector 198

8.11 Profitability Indicators of the NBFIs Sector 199

8.12 ASPI, MPI and Market Capitalisation of the CSE 210

8.13 Turnover and Foreign Participation at the CSE 211

PART I - BOXES

Page

1. Bridging the Savings-Investment Gap to Sustain High Economic Growth in Sri Lanka 5

2. Challenges in Increasing the Per Capita Income Beyond USD 4,000 12

3. The Divi negum National Programme: The National Drive to Create Prosperous Village

with Healthy and Economically Empowered Households ... ... 34

4. Developing Technology Business Incubators for a Technopreneurial Culture 55

5. Mobile Communication Technology towards Economic Growth ... ... 70

6. Solid Waste Management ... ... ... 94

7. Economic Implications of the Age Structure Transition of the Population ... 108

8. Skills and High Quality Human Capital for Sustainable Growth ... 114

9. A New Approach for Assessing the International Reserve Adequacy 141

10. Interconnectedness of Financial Institutions and Systematic Risk ... 191

11. Consequences of Unauthorised Finance Business ... 200

12. The Clean note policy ... ... 215

13. Major Economic Policy Changes and Measures ... ... 219

STATISTICAL APPENDIX

Table

NATIONAL OUTPUT AND EXPENDITURE

Gross National Product by Industrial Origin at Current Prices of Major Economic Activities 1

Gross National Product by Industrial Origin at Constant (2002) Prices of Major Economic Activities 2

Gross National Product by Industrial Origin of Major Economic Activities 3

Provincial Gross Domestic Product by Industrial Origin at Current Prices (2007-2011) 4

Resources and their Utilisation 5

Reconciliation of Key Aggregates at Current Market Prices 6

Gross Domestic Capital Formation at Current Market Prices 7

Composition of Private Consumption Expenditure at Current Market Prices 8

Expenditure on Gross National Product at Current Market Prices 9

Gross Domestic Expenditure and Availability of Resources 10

Investment and Savings at Current Market Prices 11

Real National Income 12

Trends in Principal Agricultural Crops 13

Production of Tea, Rubber, Coconut and Other Export Agriculture Crops 14

Annual Rainfall and Rainy Days 15

District-wise Performance of the Paddy Sector 16

Paddy Production 17

Performance of Other Field Crops 18

Statistics of the Sugar Sector 19

Statistics on the Forestry Sector 20

Value Added in Industry (2002 Constant Prices) 21

Value Added in Industry (Current Prices) 22

Investment Approvals in Industry by the Board of Investment of Sri Lanka 23

Realised Investments in the Board of Investment (BOI) Enterprises 24

Capacity Utilisation in Industry 25

Employment in Selected State Owned Enterprises 26

Table

Performance of Selected State Owned Enterprises 27

Regional Distribution of Industrial Enterprises 28

Industrial Production Index (IPI) of Major Divisions 29

Industiral Production Index 30

ECONOMIC AND SOCIAL INFRASTRUCTURE

Salient Features of Government Health Services 31

Salient Features of General and University Education 32

Telecommunications and Postal Services 33

Energy Sector Performance 34

Salient Features of the Transport Sector 35

Performance of the Port Services 36

Land Cultivated under the Mahaweli Development Programme 37

PRICES, WAGES, EMPLOYMENT AND PRODUCTIVITY

Movement of the Colombo Consumers Price Index (CCPI) (2002=100) 38

Movement of the Colombo Consumers Price Index (CCPI) (2006/07=100) 39

Colombo Consumers Price Index (CCPI) (2002=100) 40

Colombo Consumers Price Index (CCPI) (2006/07=100) 41

Wholesale Price Index (WPI) 42

Average Retail Prices of Selected Food Items by Province 2011 - 2012 43

Wholesale Prices of Selected Commodities 44

Wage Rate Indices 45

Average Daily Wages in the Informal Sector 46

Average Daily Wages of Informal Sector by Province 2011-2012 47

Demography 48

Population by District 49

Labour Force Participation Rate 50

Status of Employment 51

Employment by Economic Activity 52

Labour Force Trends 53

Public Sector Employment 54

Foreign Employment 55

Employees Provident Fund 56

Employees Trust Fund 57

Strikes in Private Sector Industries 58

EXTERNAL SECTOR DEVELOPMENTS AND POLICIES

Central Bank Trade Indices Value 59

Central Bank Trade Indices Volume 60

Central Bank Trade Indices Unit Value 61

Foreign Trade 62

Exports 63

Tea Exports, Sales and Prices 64

Volume and Value of Tea Exports 65

Country Classification of Tea Exports 66

Rubber Exports and Prices 67

Major Rubber Export Destinations 68

Country Classification of Garment Exports 69

Major Coconut Products Exports and Prices 70

Table

Volume and Value of Exports of Other Agricultural Products 71

Selected Industrial and Mineral Exports 72

Imports by Major Categories 73

Imports 74

Imports and Exports of Major Commodities 75

Direction of Trade - Exports 76

Direction of Trade - Imports ... ... ... ... 77

Tourism Performance 78

Some Indicators of the Regional Distribution of the Tourist Trade 79

Balance of Payments 80

Balance of Payments - Standard Presentation under BPM 5 ... 80A Services, Income and Transfers 81

Workers Remittances 82

External Resources and their Uses 83

Financing of the External Resources Gap 84

External Debt Outstanding and Banking Sector External Liabilities ... 85

End of Period Exchange Rates 86

Average Exchange Rates of Major Currencies and Monthly Indices of Nominal Effective

Exchange Rate (NEER) and Real Effective Exchange Rate (REER) ... 87

Interbank Forward Market Transactions 88

Absorption and Supply of Foreign Exchange by the Central Bank 89

FISCAL POLICY AND GOVERNMENT FINANCE

Summary of Government Fiscal Operations 90

Government Revenue 91

Payments of the Government of Sri Lanka 92

Voted Expenditure of the Government of Sri Lanka 2012 93

Voted Expenditure of the Government of Sri Lanka 2013 94

Current Transfers to Public Corporations and Institutions 95

Capital Transfers to Public Corporations and Institutions 96

Acquisition of Financial Assets (Loan Outlays) 97

Financing of the Government Net Cash Deficit 98

Economic Classification of Government Revenue 99

Economic Classification of Government Expenditure and Lending Minus Repayments 100

Economic Classification of Government Fiscal Operations 101

Composition of Outstanding Government Debt 102

Ownership of Government Debt (as at end of the year) 103

Ownership of Treasury Bills 104

Ownership of Treasury Bonds 105

Ownership of Rupee Loans 106

Ownership of Outstanding Foreign Debt 107

Foreign Loans 2012 ... 108

Net Receipts of Foreign Assistance 109

Outstanding Central Government Debt (as at end of the year) 110

Budget Outturn for Provincial Councils 111

Consolidated Budget 112

MONETARY POLICY, MONEY, CREDIT AND INTEREST RATES

Currency Issued by the Central Bank (by Denomination) 113

Monetary Aggregates M1 and M2 114

Monetary Survey M2 115

Consolidated Monetary Survey M2b 116

Financial Survey M4 117

Monetary Aggregates - Summary 118

Reserve Position of Commercial Banks 119

Money Rates : The Central Bank and Commercial Banks 120

Money Rates: Savings and Long Term Credit Institutions 121

Yield Rates on Government Securities 122

Commercial Banks Loans and Advances by Type of Security (End of Period) 123

Commercial Banks Loans and Advances to the Private Sector 124

FINANCIAL SECTOR PERFORMANCE AND SYSTEM STABILITY

Assets and Liabilities of the Central Bank 125

Assets and Liabilities of Domestic Banking Units (DBUs) of Commercial Banks 126

Assets and Liabilities of Offshore Banking Units (OBUs) of Commercial Banks 127

Assets and Liabilities of Non-Bank Financial Institutions 128

Savings and Fixed Deposits of Deposit-taking Institutions 129

Insurance Activities 130

Share Market Performance 131

Debentures Listed on the CSE in 2012 132

Total Cultivation Loans Granted by the Lending Banks (position as at 31 December 2012) 133

New Comprehensive Rural Credit Scheme Loans Granted for Subsidiary Food crops by

the Leading Bank (Poition as at 31 December 2012) 134

Operations of the Crop Insurance Programme Paddy Sector

(Position as at 31 December 2012) 135

Deposits and Advances of District Co-operative Rural Banks (2002 2012) and

District-wise Classification for 2012 ... 136

Deposits and Advances of District Co-operative Rural Banks Unions (2004 2012) and

District-wise Classification for 2012 137

SPECIAL STATISTICAL APPENDIX

Table

1. Real Sector:

Population and Labour Force ... 1

National Output and Prices ... 2

2. External Sector:

Balance of Payments ... 3

International Reserves, External Debt and Exchange Rates ... ... 4

3. Fiscal Sector:

Government Fiscal Operations ... 5

Government Debt ... 6

4. Financial Sector:

Monetary Survey ... 7

Interest Rates ... 8

5. Socio-economic Conditions: 1953 2009/10

Key Socio-economic Indicators in Sri Lanka ... ... ... ... 9

Key Socio-economic Indicators by Province ... ... ... 10

Key Socio-economic Indicators by Sector ... ... ... ... 11

1 preliminary

Documents

registered mail rs

monetary boardw

copy registered postair

copydespatch abroadair

ordinary mail rs

class us

monetary law act chapter

ministry of finance