Sri Lanka has no alternative but to print money: minister

Dec 17, 2007 (LBO) – Sri Lanka has no alternative but to print money because the government cannot move into a framework of limiting expenditure, a senior minister has said. Speaking to the British Broadcasting Service's Sinhala language Sandeshaya program, consumer affairs minister Bandula Gunewardene said it had become necessary to print money because the government had recruited 250,000 persons and defence expenditure was increasing.

Fiscal Problem

He said that between 2002 and 2003 total government service had been trimmed and vacancies of 120,000 had not been filled, but now expenses were higher.

BBC: Is the government trying to pay for all this expenditure by printing money?

Minister : Yes. There is no alternative.

BBC: The government has no alternative but to print money and inflation also goes up very fast?

Minister: Yes. In that event the government will have to stop state recruitments with immediate effect, stop the war, stop welfare expenditures, stop fertilizer subsidies, stop school mid-day meals. However, the government is not prepared to move into an expenditure limiting program because