Feb 05, 2011 (LBO) – Sri Lanka has good prospects of sustaining economic growth between 7.0 to 8.0 percent a year if the declared economic plan is implemented, an International Monetary Fund official said. The state has now unveiled a plan to stop living beyond its means by cutting deficits, which can keep interest rates low without printing money allowing people to engage in economic activities and also keep inflation low, preventing the population from becoming poor.
“The risk is that policies may not be implemented as they have been laid out,” IMFs resident representative in Colombo Koshy Mathai said.
“The policies that have been laid out seems excellent to us. Now we are looking for the implementation, in terms of the macro targets, in terms of tax reform, in terms of investment promotion and state enterprise reform.”
The IMF has just approved a 216 million dollar tranche of money from 2.6 billion dollar loan for Sri Lanka.
Sri Lanka has suffered high interest rates, high inflation, chronic currency depreciation, foreign currency shortages, balance of payments crisis and high levels of debt from deficit spending rulers even before a war started in the early 1980s.