July 03, 2008 (LBO) – Sri Lanka’s private sector has called on the government to implement politically difficult reforms and austerity measures to put the economy on a better footing. Anura Ekanayake, deputy vice chairman of the Ceylon Chamber of Commerce, said the government should do reforms to correct the wrong policies that hinder growth in the private sector which accounts for a dominant share of economic activity.
“We need to take some steps which may not be politically comfortable,” he told the Sri Lanka Economic Summit 2008 organised by the Ceylon Chamber of Commerce.
“If the private sector is the engine of growth, our engine is still not well-tuned,” he said, pointing to the erratic growth rate in recent years.
Private sector investment, which he called the ‘fuel’ in the engine, was now lower than that of the government because of deteriorating competitiveness and macro-economic fundamentals.
“Relative inflation concerns us,” Ekanayake said. “It tells us the cost at which we can produce and sell. Last year and this, our level of inflation, apart from Vietnam, was way above that of our competitors.”
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