Sri Lanka Economy

NANDANA2012 wrote:

ThilinaM wrote:privet sector have to pay gvt pin padi jobs

Exactly Thilina, it is time private sector and self employed etc with over 7 Million Voters get together and work as one force to against 1.4 Million Govt sector workers who always get many benefits using their vote base...

it is time private sector and self employed etc with over 7 Million Voters get together and work as one force to against 1.4 Million Govt sector workers who always get many benefits using their vote base...

MR and GOTA have done many BIG things, done many difficult things, But they have done many mistakes too like Mattala. They did many with Chinese loans, but by the time they got defeated, economy and finance had come to a boiling point... There is no country in the world who will have a sound economy with a extra large Government sector and loss making State Enterprises... Just to please few thousands voters you make fundamentally wrong decisions and then you loose Millions of voters when the economy is stuck.. When u cant maintain exchange rate due to high Government spending, all sort of issues (Inflation, debt increase, low foreign investments, specially in stocks, low growth, business stagnation, high crime, poverty increase, high taxes  ) start to happen...

So either we have to be like Cuba (Closing to outside world) or we have to follow economic fundamentals.. Then achieving 6-8% growth will not be difficult and when growth is good, all other issues will start dissapearing....NO BASICS - NO GROWTH....

 
http://www.colombopage.com/archive_20A/Jan19_1579455719CH.php

http://www.colombopage.com/archive_20A/Jan25_1579898998CH.php

“Our country was in the forefront of Asia in terms of economic growth from 2005-2014. Economic growth has slowed down in the last few years. One of the biggest challenges we face today is the revival of the economy,” President Rajapaksa said.


“New technology must be used to rebuild the economy. Skilled labor is another important factor. The education system too needs to be transformed to create a strong economy. It is a top priority to get more youth into tertiary education,” the President also said.


“We need to identify areas where we can serve the people and contribute more to economic growth. Institutions such as the Tourist Board and the Board of Investment have a major responsibility. These institutions should free themselves from the allegations leveled against them in the past and contribute to the economic recovery,” said the President.

Petroleum and electricity board estimate loss 200 billion lkr, more than 1 billion USD... think how to run..its so simple.

Teller wrote:Petroleum and electricity board estimate loss 200 billion lkr, more than 1 billion USD... think how to run..its so simple.

Yes true, Sri Lanka has no future with these loss making, corrupt, inefficient, filled with political staff - Govt entities. 

This Govt (Unlike Yahapalanaya) is capable of changing them, but problem is they believe these have to be kept under Govt (As they will lose earning opportunities and chance to give jobs to party people as these are very lucrative places)

We are now a developed nation if we had privatised (Properly - not given to friends for a penny) these 15/20 years back.

In total they make about 200 Billion Losses annually - a Big Chunk of Govt Expenses - about 10% of tax income and About Rs. 40000 from each family..

ThilinaM wrote:gvt jobs are salary without value addition. cost to the country without benifit

Pls promote this petition, if you agree with it..

https://www.change.org/SriLanka_Pension

Teller wrote:Petroleum and electricity board estimate loss 200 billion lkr, more than 1 billion USD... think how to run..its so simple.

Also if you calculated  Srilankan losses for last few years - You all have paid them about Rs. 40000. 

SO YOU ARE ENTITLED TO ASK A FREE TICKET FROM THEM....

Opportunity2030 study reveals the almost USD10 trillion private-sector investment opportunity in contributing to the UN Sustainable Development Goals (SDGs) in emerging markets
At USD7.3 billion, the greatest private-sector investment opportunity in Sri Lanka is investment in achieving and maintaining universal access to electricity (SDG 7)


The Standard Chartered SDG Investment Map reveals an almost USD 10 trillion (USD 9.668 trillion) opportunity for private-sector investors across all emerging markets, with Sri Lanka representing USD16.2 billion of that total.

The study identifies opportunities for the private sector to contribute to three infrastructure-focused goals between now and 2030: SDG 6: Clean Water and Sanitation, SDG 7: Affordable and Clean Energy and SDG 9: Industry, Innovation and Infrastructure across emerging markets.

Big population, big opportunities

The greatest opportunity in Sri Lanka is found in achieving and maintaining universal access to electricity (a key SDG 7 indicator), representing a USD 7.3 billion private-sector investment opportunity. This takes into account the proportion of the Sri Lankan population currently without access to electricity (2 per cent), projected population growth, and the growing demand for power as the economy develops.

For SDG 9, which encourages improvement in industry, innovation and infrastructure, Opportunity2030 highlights private sector investment opportunities in transport and improving digital access. Securing full digital adoption in Sri Lanka – a combination of mobile phone subscription rates and internet connectivity – would require private sector investment of around USD 4.1 billion. To significantly improve Sri Lanka’s transport infrastructure by 2030 provides a USD 4.6 billion investment opportunity for the private sector.

Bingumal Thewarathanthri, Chief Executive Officer at Standard Chartered Sri Lanka said:

“Sri Lanka’s commitment to the Sustainable Development Goals (SDGs) make it an attractive prospect for the private sector to invest with impact. The government is looking to increase public-private collaboration and its Vision 2025 programme aligns with the SDGs, demonstrating the commitment to the goals.

“Opportunity2030 reveals the opportunities private sector investors have to make a difference in achieving the SDGs. These findings show that in Sri Lanka there is a chance to have a real impact on millions of people’s lives over the next decade.”

This is a big lie.

Opportunity2030 study reveals the almost USD10 trillion

http://www.colombopage.com/archive_20A/Jan28_1580232434CH.php

Jan 28, Colombo: Sri Lanka Prime Minister Mahinda Rajapaksa says that as a policy, the government will not sell any national resources to foreigners.


The Prime Minister said this while participating at a function held at the Sri Lanka Customs Headquarters auditorium today to mark International Customs Day.
Addressing the gathering the Prime Minister said that the services of the Customs Department should be more efficient.


“We can promise that the events of the past ministry will not happen. We have great faith in you. It is your responsibility to exercise that trust and function more efficiently,” he said.


The Prime Minister said despite the efforts many things are brought into the country without paying taxes and if the Customs can stop them, the state revenues can be increased further.


Pointing out that the development of the country depends on the state revenues, the Prime Minister said about 57 percent of the Customs revenue is used for the country’s development.


The Prime Minister said the previous government sold the national resources belonged to the people of this country to foreigners.


“As a government policy, we are not going to sell any of our resources to foreigners,” said Prime Minister Mahinda Rajapaksa.


Ministers Wimal Weerawansa, Johnston Fernando, State Minister Shehan Semasinghe and Finance Ministry Secretary SR Attygalle and several others were present at the occasion.

We should not sell and strictly no lease 99 years too. Recently 3 acre was given 42 millions $ , for 99 yrs

KavinduTM wrote:http://www.colombopage.com/archive_20A/Jan28_1580232434CH.php

Jan 28, Colombo: Sri Lanka Prime Minister Mahinda Rajapaksa says that as a policy, the government will not sell any national resources to foreigners.


The Prime Minister said this while participating at a function held at the Sri Lanka Customs Headquarters auditorium today to mark International Customs Day.
Addressing the gathering the Prime Minister said that the services of the Customs Department should be more efficient.


“We can promise that the events of the past ministry will not happen. We have great faith in you. It is your responsibility to exercise that trust and function more efficiently,” he said.


The Prime Minister said despite the efforts many things are brought into the country without paying taxes and if the Customs can stop them, the state revenues can be increased further.


Pointing out that the development of the country depends on the state revenues, the Prime Minister said about 57 percent of the Customs revenue is used for the country’s development.


The Prime Minister said the previous government sold the national resources belonged to the people of this country to foreigners.


“As a government policy, we are not going to sell any of our resources to foreigners,” said Prime Minister Mahinda Rajapaksa.


Ministers Wimal Weerawansa, Johnston Fernando, State Minister Shehan Semasinghe and Finance Ministry Secretary SR Attygalle and several others were present at the occasion.

Biggest joke of the year.....

As long as majority of Srilanka citizens are blind, politicians can make these types of nonsense joke frequently as a time pass.....

Teller wrote:We should not sell  and strictly no lease 99 years too. Recently 3 acre was given 42 millions $ , for 99 yrs

Ah 99 yrs is too much neh 

However they earned 2 times from same deal which was started by previous gov.

Arrowrisk wrote:

KavinduTM wrote:http://www.colombopage.com/archive_20A/Jan28_1580232434CH.php

Jan 28, Colombo: Sri Lanka Prime Minister Mahinda Rajapaksa says that as a policy, the government will not sell any national resources to foreigners.


The Prime Minister said this while participating at a function held at the Sri Lanka Customs Headquarters auditorium today to mark International Customs Day.
Addressing the gathering the Prime Minister said that the services of the Customs Department should be more efficient.


“We can promise that the events of the past ministry will not happen. We have great faith in you. It is your responsibility to exercise that trust and function more efficiently,” he said.


The Prime Minister said despite the efforts many things are brought into the country without paying taxes and if the Customs can stop them, the state revenues can be increased further.


Pointing out that the development of the country depends on the state revenues, the Prime Minister said about 57 percent of the Customs revenue is used for the country’s development.


The Prime Minister said the previous government sold the national resources belonged to the people of this country to foreigners.


“As a government policy, we are not going to sell any of our resources to foreigners,” said Prime Minister Mahinda Rajapaksa.


Ministers Wimal Weerawansa, Johnston Fernando, State Minister Shehan Semasinghe and Finance Ministry Secretary SR Attygalle and several others were present at the occasion.

Biggest joke of the year.....

As long as majority of Srilanka citizens are blind, politicians can make these types of nonsense joke frequently as a time pass.....

You must be talking about that land deal. And we are not blind Mr.

KavinduTM wrote:

Arrowrisk wrote:

KavinduTM wrote:http://www.colombopage.com/archive_20A/Jan28_1580232434CH.php

Jan 28, Colombo: Sri Lanka Prime Minister Mahinda Rajapaksa says that as a policy, the government will not sell any national resources to foreigners.


The Prime Minister said this while participating at a function held at the Sri Lanka Customs Headquarters auditorium today to mark International Customs Day.
Addressing the gathering the Prime Minister said that the services of the Customs Department should be more efficient.


“We can promise that the events of the past ministry will not happen. We have great faith in you. It is your responsibility to exercise that trust and function more efficiently,” he said.


The Prime Minister said despite the efforts many things are brought into the country without paying taxes and if the Customs can stop them, the state revenues can be increased further.


Pointing out that the development of the country depends on the state revenues, the Prime Minister said about 57 percent of the Customs revenue is used for the country’s development.


The Prime Minister said the previous government sold the national resources belonged to the people of this country to foreigners.


“As a government policy, we are not going to sell any of our resources to foreigners,” said Prime Minister Mahinda Rajapaksa.


Ministers Wimal Weerawansa, Johnston Fernando, State Minister Shehan Semasinghe and Finance Ministry Secretary SR Attygalle and several others were present at the occasion.

Biggest joke of the year.....

As long as majority of Srilanka citizens are blind, politicians can make these types of nonsense joke frequently as a time pass.....

You must be talking about that land deal. And we are not blind Mr.

Im not saying everyone is blind but 60%-70% of our voters are mere followers of party politics. We have seen it in Central bank bond issue revelation too.

ECONOMYNEXT – Sri Lanka is seeking parliamentary approval to spend 156 billion rupees more and raise up to 357 billion rupees in gross debt, in a supplement to a vote-on-account or a mini-budget running up to April 2020.

“We request a supplementary estimate of 101 billion rupees for recurrent expenditure and 55 billion rupees for capital expenditure be approved for the vote on account,” Prime Minister Mahinda Rajapaksa who is also Finance Minister told parliament.

Rakapaksa also sought parliamentary approval to raise a debt limit from 721 billion rupees in the original vote on account to 1,078 billion rupees or 357 billion rupees for the four months.

The original vote on account estimated revenues at 745 billion rupees and total outflows including spending and debt repayment at 1,470 billion rupees.

Rajapaksa who took over after President Gotabaya Rajapaksa was elected President in November, said there were payment arrears and a revenue shortfall in 2019.

“In addition, to account for foreign debt, we request 2,011 billion rupees in a supplementary estimate,” Rajapaksa said.

“High interest loans had been taken, and some foreign loans exceeded estimates, so they have still not been accounted,” he said.

In 2019 Sri Lanka raised extra foreign debt, under new debt management law to pay loans in 2020.

Sri Lanka had also slashed taxes in a so-called ‘stimulus’ for 2020 with value added taxes halved, some taxes abolished, the cost of which has been estimated at about 500 to 600 billion rupees for the full year according to government spokesmen.

Rajapaksa blamed the last administration for running large payment arrears for suppliers which he had to pay.

He said out of about 2,400 billion rupees in revenue targets for 2019, collections had reached about 1,600 billion rupees by November, which grew to about 1,800 billion rupees in December, causing a shortfall of about 600 billion rupees.

Rajapaksa said there were arrears suppliers for expenditure incurred in 2019 around 156 billion rupees.

He said the government owed 45.86 billion rupees to banks for an interest bonus given for senior citizens.

Another 25.7 billion rupees were owed to pharmaceutical suppliers for state hospitals.

Road development contractors were owed 18.45 billion rupees, urban development contractors were owed 6.66 billion rupees and construction of schools had a price tag of 2.8 billion rupees, Rajapaksa said.

Election related expenses were 1.2 billion rupees, with another 400 million rupees required for the 2020 general elections.

The government also owed 23.51 billion rupees for fertilizer suppliers, which has caused problems in providing the fertilizer subsidy, Rajapaksa said.

Military and other state-dependent institutions were owed 5.5 billion rupees.

Capital projects at provincial, district and local government levels required 3.9 billion rupees, while Northern rehabilitation and resettlement needed another 3.1 billion rupees, Rajapaksa said.

Higher education and water supply projects had 2 billion rupees in delays while irrigation and rural development contractors were owed 6.6 billion rupees.

Other delayed payments totalled 13.3 billion rupees, Prime Minister Rajapaksa said.(Colombo/Feb06/2020)

Sri Lanka’s government will present a supplementary estimate to increase spending by 156 billion rupees for 2020 and expand the debt ceiling, as provisioned finances had run out by November, the Prime Minister said.

“The provisions were not enough to repay expenditure in November and December, so funds required for functioning the vote on account for the first four months of 2020 could not be released,” Mahinda Rajapaksa said in parliament on Wednesday.

“In addition, to account for foreign debt, we request 2,011 billion rupees in a supplementary estimate,” he said.

“High interest loans had been taken, and some foreign loans exceeded estimates, so they have still not been accounted,” he said.

An Active Liability Management Act allows for the government to raise extra funds to repay maturing debt.

Great 

http://www.colombopage.com/archive_20A/Feb08_1581132898CH.php

We can use this topic for all kinda news related economy,country or anything if it's a news.

Dear admin, Please move below topics here.

IMF projects...
President committed to recover...
Srilanka President gifts Ceylon tea..
Denmark's Orana to invest...

And there were more. Thanks

Tax revisions expected to stay for next five years


The government's recent tax revisions will not be changed or revised for the next five years. The government is trying to pass all benefits to the public, said Secretary to the President Dr P.B Jayasundera recently.


This was revealed to the media by the Commissioner General, Department of Inland Revenue Nadun Guruge at a briefing held yesterday at the Inland Revenue Department head office. He announced the latest trade agreement between Sri Lanka and Turkey to eliminate double taxation with regard to taxes on income and the prevention of tax evasion and avoidance.


He said that Dr Jayasundera visited the Inland Revenue Department and gave the assurance that recent tax revisions will not be changed for the next five years and certain sectors that have not passed those benefits to the public, such as the bakery sector, will be taken into consideration. Sri Lanka and Turkey concluded the negotiations of the "Elimination of Double Taxation with respect to taxes on income and the prevention of tax evasion and avoidance" from 21st to 24th January 2020 in Ankara.


Under this agreement both countries could promote trade, investment and tourism with a single taxation. Therefore, Sri Lanka could penetrate Turkish export markets, especially tea and other commodities subjected to a single tax system, Guruge said.


Guruge said that Turkish businessmen interested in investing in Sri Lanka, will be given a boost. The Commissioner General of Inland Revenue, Sri Lanka and the Deputy Controller General of the Presidency of Turkish Revenue Administration initialled the agreement.

විදේශීය සමාගම් මෙරට ලියාපදිංචිය අත්හිටුවීමේ තීරණය හෙට දිනයේ ඉවත් කරන බව සමාගම් ලියාපදිංචි කිරීමේ සහකාර ලේඛකාධිකාරී කියයි
#lka #News1st

Sri Lanka imports to fall in 2020, external account to improve: CB Governor
Monday February 10, 2020 17:16:04

ECONOMYNEXT – Sri Lanka will see a slow improvement in external accounts, trade deficit will continue to fall in 2020, and there will be no adverse development in foreign exchange reserves, Central Bank Governor W D Lakshaman said.

“The contraction in imports is likely to continue this year,” he told a business forum organized by Ceylon Chamber of Commerce in Colombo.

“The 2019 decline in the trade deficit is expected to continue in 2020.”

There will be ‘exchange rate stability at competitive levels,” he said.
Capital flows will also improve in 2020. There will more confidence in political stability among individuals and businesses he said.

“Foreign capital flows, portfolio and direct investment, are expected to grow with improving business confidence,” he said.

“The workers’ remittances, are expected to remain more or less stable without making significant gains.”

Sri Lanka economy will recover close to 4 percent in 2020, Lakshman said backed by improving business confidence, low and stable inflation. Sri Lanka has taken both fiscal and monetary measures to boost growth he said. (Colombo/Feb10/2020)

ECONOMYNEXT- Sri Lanka’s industrial activitiy slowed in December from a month earlier, with a fall in apparel manufacturing, the state statistics office said.

The Index of Industrial Production (IIP) compiled by the Census and Statistics Department fell 0.2 percent to in December to 108.6 points.

An index value of over 100 denotes growth from 2015, the IIP’s base year.

In the past, the IIP has marginally grown in December.

The fall came mainly due to a 9.8 percent fall in apparel manufacturing, which is Sri Lanka’s leading export.

The apparel industry contributes to a fifth of the industrial production, which is the second highest in the country.

Apparel exports had fallen 1.7 percent in December. The Sri Lanka Apparel Exporters Association had said exports would face a downturn till April, especially due to Brexit.

Food manufacturing, which is the largest industrial segment comprising a third of the total, grew 7.2 percent during December, amid Christmas holidays.

Non-metallic minerals and refined petroleum production, each of which contribute 7-8 percent to industrial activity, grew 1.8 percent and 20.4 percent respectively.

Refined petroleum production recorded the highest growth during the month.

Rubber and plastic making, which is the fifth largest industrial segment, grew 1.1 percent.

The highest fall in December were from textile manufacturing, down 33.9 percent and pharmaceutical production, down 32.5 percent.

Meanwhile, the IIP for the fourth quarter of 2019 grew 0.7 percent to 109.8 points from a year earlier with higher food production. (Colombo/Feb12/2020)

"Sri Lanka tax revenues, economy to pick up from second half of 2020: Treasury Secy"

ECONOMYNEXT – Sri Lanka’s state revenues will pick up in the second half of 2020, as tax cuts and lower interest rates expand disposable incomes, investment and economic activity, Treasury Secretary S R Attygalle has said.

“While there could be an initial decrease in on government incomes it is expected that incomes will pick up in especially for the second half of 2020,” Attygalle told member of Sri Lanka’s Exporters Association Wednesday night.

“Clearly there many ways of reviving economies but no economy has revived with high tax rates in times of trouble.

“In fact high tax rates get economies into trouble. Hence the tax reforms announced in December 2019 was aimed at simplifying the tax system increase the disposable income of tax payers and thereby stimulating growth.”

He said estimates of tax losses made by some were overblown because economies were dynamic and not static.

“I believe that there are people who believe ceteris paribus (all other conditions remaining the same) actually exists,” he quipped.

Rate cuts and falling interest rates will also help drive economic activity. Stronger growth will in turn help reduce bad loans at banks, he said.

This year the Maha rice harvest is also expected to be strong, which will help incomes of the rural economy.

In 2019, economic growth is expected to have fallen to 2.6 percent of gross domestic product by the International Monetary Fund, which is projecting a revival to 3.7 percent.

Deficit

Attygalle said the government had already undertaken “significant expenditure rationalization” no new office space had been rented, no vehicles bought. Cost cutting measures will be monitored during the year, he said.

In 2020 the overall budget deficit is expected to be around 7.5 percent of gross domestic product, he said.

The deficit will in part be driven by 200 billion rupees of unpaid bill and unaccounted expense from last year, which will be paid in 2020, he said.

“And when such bills are paid and accounted for in 2020 the budget deficit which was to be around 5 percent this year will now increase to almost 7.5 percent,” he said.

The IMF said tax cuts and arrears from 2019 could drive the deficit to 7.9 percent of GDP.

2019 revenues are estimated to be around 1,800 billion rupees, he said from an initial estimate of around 2,400 trillion.

The IMF revised down the revenue for 2019 to 1,975 billion rupees in a November review after a soft-peg of the rupee with the US dollar collapsed from 153 to 182 to the US dollar in 2018 amid liquidity injections.

Currency collapse and corrective measures lead to output shocks and revenue shortfalls and credit contracts.

State owned enterprises have been told to ‘clean up their act’ he said, with significant improvements in the quality of their board of directors, though not perfect.

Performance indicators and a code of conduct were being devised for SOEs. (Colombo/Feb13/2020)

Ekanayake90 wrote:"Sri Lanka tax revenues, economy to pick up from second half of 2020: Treasury Secy"

ECONOMYNEXT – Sri Lanka’s state revenues will pick up in the second half of 2020, as tax cuts and lower interest rates expand disposable incomes, investment and economic activity, Treasury Secretary S R Attygalle has said.

“While there could be an initial decrease in on government incomes it is expected that incomes will pick up in especially for the second half of 2020,” Attygalle told member of Sri Lanka’s Exporters Association Wednesday night.

“Clearly there many ways of reviving economies but no economy has revived with high tax rates in times of trouble.

“In fact high tax rates get economies into trouble. Hence the tax reforms announced in December 2019 was aimed at simplifying the tax system increase the disposable income of tax payers and thereby stimulating growth.”

He said estimates of tax losses made by some were overblown because economies were dynamic and not static.

“I believe that there are people who believe ceteris paribus (all other conditions remaining the same) actually exists,” he quipped.

Rate cuts and falling interest rates will also help drive economic activity. Stronger growth will in turn help reduce bad loans at banks, he said.

This year the Maha rice harvest is also expected to be strong, which will help incomes of the rural economy.

In 2019, economic growth is expected to have fallen to 2.6 percent of gross domestic product by the International Monetary Fund, which is projecting a revival to 3.7 percent.

Deficit

Attygalle said the government had already undertaken “significant expenditure rationalization” no new office space had been rented, no vehicles bought. Cost cutting measures will be monitored during the year, he said.

In 2020 the overall budget deficit is expected to be around 7.5 percent of gross domestic product, he said.

The deficit will in part be driven by 200 billion rupees of unpaid bill and unaccounted expense from last year, which will be paid in 2020, he said.

“And when such bills are paid and accounted for in 2020 the budget deficit which was to be around 5 percent this year will now increase to almost 7.5 percent,” he said.

The IMF said tax cuts and arrears from 2019 could drive the deficit to 7.9 percent of GDP.

2019 revenues are estimated to be around 1,800 billion rupees, he said from an initial estimate of around 2,400 trillion.

The IMF revised down the revenue for 2019 to 1,975 billion rupees in a November review after a soft-peg of the rupee with the US dollar collapsed from 153 to 182 to the US dollar in 2018 amid liquidity injections.

Currency collapse and corrective measures lead to output shocks and revenue shortfalls and credit contracts.

State owned enterprises have been told to ‘clean up their act’ he said, with significant improvements in the quality of their board of directors, though not perfect.

Performance indicators and a code of conduct were being devised for SOEs. (Colombo/Feb13/2020)

Good vision. Country is on the correct track

KavinduTM wrote:

Ekanayake90 wrote:"Sri Lanka tax revenues, economy to pick up from second half of 2020: Treasury Secy"

ECONOMYNEXT – Sri Lanka’s state revenues will pick up in the second half of 2020, as tax cuts and lower interest rates expand disposable incomes, investment and economic activity, Treasury Secretary S R Attygalle has said.

“While there could be an initial decrease in on government incomes it is expected that incomes will pick up in especially for the second half of 2020,” Attygalle told member of Sri Lanka’s Exporters Association Wednesday night.

“Clearly there many ways of reviving economies but no economy has revived with high tax rates in times of trouble.

“In fact high tax rates get economies into trouble. Hence the tax reforms announced in December 2019 was aimed at simplifying the tax system increase the disposable income of tax payers and thereby stimulating growth.”

He said estimates of tax losses made by some were overblown because economies were dynamic and not static.

“I believe that there are people who believe ceteris paribus (all other conditions remaining the same) actually exists,” he quipped.

Rate cuts and falling interest rates will also help drive economic activity. Stronger growth will in turn help reduce bad loans at banks, he said.

This year the Maha rice harvest is also expected to be strong, which will help incomes of the rural economy.

In 2019, economic growth is expected to have fallen to 2.6 percent of gross domestic product by the International Monetary Fund, which is projecting a revival to 3.7 percent.

Deficit

Attygalle said the government had already undertaken “significant expenditure rationalization” no new office space had been rented, no vehicles bought. Cost cutting measures will be monitored during the year, he said.

In 2020 the overall budget deficit is expected to be around 7.5 percent of gross domestic product, he said.

The deficit will in part be driven by 200 billion rupees of unpaid bill and unaccounted expense from last year, which will be paid in 2020, he said.

“And when such bills are paid and accounted for in 2020 the budget deficit which was to be around 5 percent this year will now increase to almost 7.5 percent,” he said.

The IMF said tax cuts and arrears from 2019 could drive the deficit to 7.9 percent of GDP.

2019 revenues are estimated to be around 1,800 billion rupees, he said from an initial estimate of around 2,400 trillion.

The IMF revised down the revenue for 2019 to 1,975 billion rupees in a November review after a soft-peg of the rupee with the US dollar collapsed from 153 to 182 to the US dollar in 2018 amid liquidity injections.

Currency collapse and corrective measures lead to output shocks and revenue shortfalls and credit contracts.

State owned enterprises have been told to ‘clean up their act’ he said, with significant improvements in the quality of their board of directors, though not perfect.

Performance indicators and a code of conduct were being devised for SOEs. (Colombo/Feb13/2020)

Good vision. Country is on the correct track

Indeed