Sri Lanka’s growth expectation 5.5-pct this year: CB Governor

Indrajit-Coomaraswamy

Aug 31, 2016 (LBO) – Sri Lanka’s growth expectation for this year is about 5 to 5.5 percent as things stand, Central Bank Governor Dr. Indrajith Coomaraswamy told reporters.

Coomaraswamy said no additional foreign borrowings are expected for this year.

“We don’t anticipate any additional external borrowings for this year apart from T-bills and bonds,” Coomaraswamy said.

He said there is an uncertainty in terms of IMF loan disbursements because of VAT hike delay.

“There is a IMF review in September, as of June we are very much on track but as of now there is a bit of uncertainty because of VAT, but still good.”

Deputy Governor Nandalal Weerasinghe however said September targets basically don’t matter much as they are only indicative targets.

“Performance criteria only applies for end June and end December review,” Weerasinghe added.

He said the new diesel tax will be a new revenue stream for the government and the changes in tax collection by revenue department led to an increase in tax collection.

“Even without VAT, tax collection has increased by about 20 percent. If there is a deficit in revenue targets, the government will have to reduce recurrent expenditure.”