SL GDP to grow 7% from 2020 - Mangala

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By 2017-10-19

Highlighting recent economic developments and prospects in Sri Lanka, Minister of Finance and Mass Media Mangala Samaraweera said that although still below growth potential, Sri Lanka's economy is expected to grow by around 4.5% in 2017 and projected to move to a higher growth path of around 7.0% by 2020, with ongoing broader structural reforms and enhanced investor confidence.
Addressing the World Bank/International Monetary Fund's annual meeting in Washington, he said that reform initiatives towards this direction are supported by the 3-year arrangement under the Extended Fund Facility (EFF) of US$ 1.5 billion that Sri Lanka entered into with the IMF in June 2016. The programme aims to strengthen the external and fiscal balances of the economy.
Although headline inflation remained above the envisaged mid-single digit levels, core inflation decelerated gradually, reflecting the containment of demand-driven inflationary pressures in the economy that resulted from restrictive monetary policy measures adopted since end 2015, he said.

On the fiscal front, the Minister said there was a significant improvement, reflecting the Government's strong commitment towards revenue-based fiscal consolidation.

Sri Lanka's external sector recorded a mixed performance during the first half of 2017. The country's gross official reserves improved to US$ 7.3 billion by end-September 2017, which was equivalent to about 4.5 months of imports, he said.
The Sri Lankan rupee has depreciated by 2.2% against the US dollar so far during the year. The exchange rate regime is now flexible and market-oriented, he said.

The financial sector continued its growth momentum during the first half of 2017 with improved stability and soundness with improved capital adequacy, liquidity and asset quality of the banking sector, he said.

Samaraweera, reiterating the broad development strategy of the Unity Government, said that it was on a three-pillared agenda of democratization, reconciliation, and sustainable and equitable development, with employment generation that transmits the benefits of growth across wider society.

"Sri Lanka's growth model would be private sector driven, with exports and FDI as key
pillars, supported by technological advancement and innovation," he said.

"In this process, we are committed to improve human capital and skills, set up globally-recognized regulatory mechanisms and investment practices, in addition to the improvement of physical infrastructure. This would create the best enabling environment for Sri Lanka to attract more businesses, trade and investment, to become a higher income country," he said.

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