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Poor Outlook

ldblquote 2001 was one of the worst years in terms of economic performance.
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Poor monetary and fiscal management was compounded by a series of external and internal shocks, dblquote he said addressing a Norwegian Aid delegation on Sri Lanka quote s economic revival plan.
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rnrnHefty military spending, a stalled privatization programme and mounting losses at key state corporations resulted in the budget deficit overshooting its target of 9.5 percent to 11 percent last year.

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Inflation also shot up to 12 percent during the period.

rnHe said the government was targeting a budget deficit of 8.5 percent of GDP in 2002, by curbing expenditure lquote without effecting the implementation of donor funded projects quote .

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rnldblquote Over the medium term, we are hoping to reduce the budget deficit to around 6 percent of GDP and to increase the growth rate to over 7 percent in the medium term. dblquote

rnThe government has already indicated its commitment to further liberalizing and deregulating the economy.

r

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