Sri Lanka had low inflation only with fiscal discipline: minister

July 07, 2007 (LBO) – The state was not in a position to control prices of imported goods and price levels can only be stabilized by stopping money printing and limiting government expenses, Sri Lanka's consumer affairs minister said. Consumer affairs minister Bandula Gunewardene said tight monetary policy by the central bank had already brought inflation down from 20.5 percent to 13.0 percent.

But some elements and even the media were projecting a different picture threatening to undermine the stability of the economy that was now being brought about.

"I saw an editorial today saying inflation was 20 percent," Gunewardene told reporters at the weekly post cabinet news briefing.

"I cannot understand why this is said. The basic premise here is wrong."

He said he joined the government at a time of high inflation with the intention of working with all the parties to strengthen the economy.

Gunewardene was deputy finance minister under a government that ran the country during 2002 and 2003 and brought consumer price increases to almost zero and the currency appreciated as economic growth took off without inflation.

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He said a similar outcry had thrown that government out of offic