May 12, 2017 (LBO) – Sri Lanka’s economic growth is expected to rebound modestly to around 4.8-4.9 percent in 2017 and 2018, the Economic and Social Survey for Asia and the Pacific 2016 showed.
The survey which is the flagship publication of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) officially launched its findings simultaneously in 24 locations around the world, this week.
As per the report, a major headwind to stronger growth prospects in Sri Lanka is fiscal tightening that would constrain consumer spending and public investment, especially in an environment of higher domestic interest rates.
The country’s medium-term economic development is contingent upon the success of reforms designed to reduce stubbornly large fiscal and trade deficits, the report highlighted.
Economic growth in Sri Lanka moderated to 4.4 percent in 2016, from 4.8 percent in 2015 and an average of 7.4 percent during the period 2010-2014.
Public debt currently stands at close to 80 percent of GDP with a large share being foreign currency denominated.
There are efforts to tax e-commerce transactions, reform State-owned enterprises and improve tax administration.
“The main focus on this year’s ESCAP Report is on Governance and Fiscal Management,” delivering the keynote address, Central Bank Governor Dr. Indrajit Coomaraswamy stated.
“For Sri Lanka it is of utmost importance that effective fiscal management drives our work. Sri Lanka’s location and external relations stands well in supporting an export driven economy,”
“It is important that we find financial options that can support the achievement of these goals. This is the main highlight of this year’s ESCAP Report, which makes it a useful tool for policy decision makers within Sri Lanka and the region.”