SL Central Bank Governor W D Lakshman speaks at Economic Summit 2020

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Dec 02, 2020 (LBO) – Governor of Sri Lanka’s Central Bank W D Lakshman says Sri Lanka pushing up investor confidence with strong political stability, leading to policy consistency and coherence.

Speaking Sri Lanka Economic Summit 2020 he said despite the spill-overs of global and domestic disruptions stemming from the COVID-19 pandemic, the Government is steadfastly progressing with its agenda of socio-economic development.

“The Budget presented on the 17th of November 2020 has affirmed the Government’s commitment to a people-centric economic policy,”

“The policy framework highlighted in the Budget statement points towards several novel alternative features. Domestic “production economy” has taken the centre stage.”

Domestic production activities are promoted, with directed attention paid to selected economic sectors, with a clear focus on export as well as domestic markets.

We are not surprised that most international organisations, rating agencies, as well as certain domestic quarters, which are so used to certain traditional ways of thinking, remain sceptical about these alternative policy stances without making the effort to understand the new framework, he added.

“The recent comment of Faris Hadad-Zervos, the World Bank Country Director for Maldives, Nepal and Sri Lanka after his recent visit about “a growing understanding of the Sri Lankan sustainable development storyline and aspirations” is encouraging.”

The current diversified World Bank portfolio in Sri Lanka has been noted as consisting of 19 ongoing projects with total commitment value of USD 3.65 billion.

The Sri Lanka economy was provisionally estimated to have contracted by 1.6 per cent in the first quarter of 2020, year-on-year.

Explaining further about the island growth he said the second quarter performance would have been worse but the GDP estimates for any period after the first quarter are not yet available.

“High frequency data indicate a strong recovery in many areas of economic activity in the third quarter, prior to the resurgence of COVID-19 infections and resultant containment measures starting from October 2020,”

“As in the case of statistical agencies worldwide, the Department of Census and Statistics, is perhaps grappling with the identification of suitable statistical apparatus to properly measure value added in economic activities that have undergone significant structural changes and the increasing emergence of new ways of doing things during these COVID-19 affected times.”

Compilation work has also become challenging with social distancing and office closures weighing negatively on response rates and the accuracy of surveys.