The Central Bank has criticized ad hoc recruitment to the public sector as well as the non-performance-based benefits to government employees in its annual report presented earlier this month.

The report has commented on the sharp rise in public sector recruitments and said that this had led to a significant reduction in the unemployment rate to 6% at the end of last year from 7.7% in 2005.

It has also said that unemployment is estimated to have declined to its lowest recorded levels in the fourth quarter of last year but stressed the need for substantial improvement of labour productivity.

If not, the report says that there is a potential hindrance to future higher growth prospects.

The Central Bank has made the point that soft jobs available in the public sector had not only discouraged the unemployed youth from joining the private sector but also encouraged those already engaged in the private sector to join the public sector.

"Increasing public sector employment not only leads to over-staffing of public services, resulting in higher unemployment and higher recurring expenditure to government, but also creates a shortage of workers in the private sector," the report said.