According to a recent Ministry of Finance report, the worst hit is the agriculture sector where growth will be negative. With economic growth and investment falling and revenues and remittances looking up, the ministry's report has described the performance of the economy as mixed. Besides persisting drought, high international oil prices and the behaviour of the US economy have been described as the risk factors. Seen in this backdrop, what clearly emerges is that the challenges facing the economy are not over yet. Investment has not picked up to the desired levels.
Trade balance is under strain.
The slow-down in imports is symptomatic of slower growth in industrial production. Debt burden has remained high and the proposed debt management strategy will need to be put in place without any further loss of time. These encouraging trends will need to be consolidated. As production from the agriculture sector is dependent on weather, the limits to its growth have been exposed. While it is still necessary to maintain self-sufficiency in food, the emphasis ought to shift to accelerating investment and industrial production.