Transport Sector Driving Economic Activity in Sri Lanka: Opportunities and Challenges

Abstract

An expectation to double the per capita income in five years through a sustained GDP growth rate of 9 per cent could only hold ground under very favourable economic conditions. On the one hand, this projected acceleration of economic activity, if practically realized, would demand a substantial amount of investment expenditure which could cause a widening of resource gap leading the economy into a debt trap. On the other hand, if the service sector including the transport sector could not augment to meet up the investments and expected output expansions, the targeted growth itself could be at risk. Neither scenario would be favourable. A way out of this apparent impasse is to increase investment productivity—by way of being observant in capital spending and improving the trickle-down effect of investment expenditure against mere capital accumulation.