July 12, 2013, 8:41 pm
A top IMF economist said that although Sri Lanka had made some progress in achieving high economic growth, the country needed to maintain macroeconomic stability and adopt an open trade policy to spur growth, attract foreign direct investment and invest on productivity.
"If Sri Lanka can improve its productivity by an additional 3.5 percent and capital expenditure by 2 percent the government and Central Bank set target of 8 percent plus economic growth during the next 10 to 15 years is achievable and is a feasible goal," International Monetary Fund Director Asia and pacific Anoop Singh said addressing the 14th Sri Lanka Economic Summit organized by the Ceylon Chamber of Commerce earlier this week.
He said Sri Lanka had made some progress in term of high economic growth and lower inflation. The current account and reserves has also improved but were still weaker compared too many ASEAN countries.
He said Sri Lanka should stabilize inflation at single digits and well managed fiscal consolidation was required for the country to grow at 8 percent, while the external sector needs to be strengthened.
Sri Lanka has a fiscal deficit which is being addressed through several tax reforms in the recent years which would take some time to generate revenue to support the economy which still is considered to be lower compared to many regional countries. Government debt has been reducing but was still higher than the region and the country should focus on savings and finance trough FDIs.