COLOMBO, Nov 7 (Reuters) - Sri Lanka's private sector borrowings are not going into investments although credit growth has remained high, Central Bank Governor Indrajit Coomaraswamy said on Tuesday.
"We see a sticky downward growth in credit but we don't see the credit going for investments. Net credit for the government is also high," Coomaraswamy told reporters in Colombo after the central bank's monetary policy announcement.
"Some credit, like for agriculture, has not given much output," he said when asked why higher private sector credit growth was not feeding into higher economic growth.
He also said the island nation would see economic growth of between 4-4.5 percent this year.
Private sector credit grew 17.5 percent on-year in September, slowing from 18 percent a month ago, but much lower than a near four-year high of 28.5 percent hit in July 2016. But analysts say higher credit growth has failed to spur economic growth. (Reporting by Shihar Aneez; Editing by Jacqueline Wong)