Dec 09, 2019 (LBO) – Sri Lanka’s economic activity will pick up following a series of tax cuts and the expansion of economic activity will boost Gross Domestic Product growth to reach 6.5 percent from 2020 onwards, a senior official said.
“Sri Lanka’s new government headed by President Gotabaya Rajapaksa in the short-term has to energize and revive the economy, get the businessmen going and attract investors while guiding the country towards a prosperous future,” Ajith Nivard Cabral, senior advisor to Prime Minister Mahinda Rajapaksa and former Central Bank Governor told Lanka Business Online.
“Our target includes achieving a 6.5-percent economic growth per annum on average from 2020 onwards for the next five years,”
This will be a tough call, though, he says.
“We used to have this kind of growth on a routine basis during the Mahinda Rajapaksa era but the people did not realise this was happening.
“Only in the last five years when it was not happening the people realized and started to question,”
“So this needs to be done without upsetting the macro fundamentals any further and if at all make it stronger; the reserves, debt and interest rates need to be managed in way that it supports the growth of the economy.”
Sri Lanka’s economic growth dropped to 1.6 percent in the second quarter of 2019 down from 3.9 percent in 2018, from the effect of a currency collapse in 2018, which was worsened by a hit on tourism from Easter Sunday attacks.
“In the past five years, revenue has come down, inflation, unemployment and the Cost of Living has gone up, and the economy has lacked stability.”
“The government will accelerate growth and ensure all stakeholders are safe. We are looking at particularly revitalizing the tourism and port sectors.”
He says at the current 3 percent growth projection it will take 60 years for people to attain prosperity.
“This is not what the people are looking for.”
Sri Lanka’s new interim government was appointed last month following the election victory of President Gotabaya Rajapaksa at the Nov. 16 Presidential Elections.
Upgrading the economic development of the island and providing immediate financial relief to the people were among the main pledges of President Rajapaksa in the run up to the polls.