Sept 14, 2018 (LBO) – Sri Lanka is not looking at diverting from the path of its ongoing fiscal consolidation measures and would take further necessary steps to achieve set growth targets, state minister of Finance Eran Wickramaratne said.
He was speaking at the Sri Lanka Economic Summit organised by the Ceylon Chamber of Commerce (CCC) in Colombo, Thursday.
“There are two exogenous factors that generally impact Sri Lanka; the unpredictable weather patterns and escalating fuel prices,” he said.
“Adverse weather impacted over 20 districts in Sri Lanka in 2017 and it was one of the reasons, the government deviated somewhat from its fiscal consolidation efforts.”
The minister says in 2015, our budget deficit as a percentage of GDP was in excess of 7 percent, the present government managed to bring it down to 5.5 percent and are hoping that it will go below 5 percent in 2018.
“The road has been hard – the narrower fiscal space has given us less opportunities for economic expansion,”
“But we will not divert from fiscal consolidation because we think that we need to look at the vulnerabilities and take a much longer perspective.”
Speaking further the Minister also said that Free Trade Agreements will increase Sri Lanka’s exports immediately and that the island has gained many benefits from the Indo-Lanka trade agreement.
“The government is confident that the Economic and Technology Co-operation Agreement (ETCA), will add to the existing free trade agreement between India and Sri Lanka,”
“The country needs to begin inking much needed trade links especially with East while making more trade integration with South Asia.”
There is no other way, he stressed.
“We have to be ready to compete. Our market with a population of 21 million won’t make any huge difference to the living standards,”
“We have to access larger markets and also to be the gateway to the South Asian market.”