IMF expects an uptick of Sri Lankan economy in 2017 and 2018
IMF has expressed that the Sri Lankan economy will bounce back in 2017 despite less than expected showing of GPD growth rate at just 3.8 during the first quarter of 2017. However, IMF states despite the slow growth rate Sri Lankan economy will accelerate in the year 2018.
According to the IMF, the slow growth rate is a direct result of the drought encountered by many parts of the island in the year of 2017. The drought directly affected much of the agricultural output, in some cases completely shutting down production or in many cases forcing poorer harvests.
Ranil Salgado, chief of the Regional Studies Division, Asia and Pacific Department of the IMF commented, “The Fund-supported program is back on track with the second review just completed,” and ““The program’s objective is to promote macroeconomic stability while strengthening Sri Lanka’s external resilience in a more challenging global economy.”
IMF also noted that Sri Lanka’s Inland Revenue Act is set to compliment and be consistent with IMF recommendations and that it would serve to make Sri Lanka’s fiscal management more stable. The Inland Revenue Act is directly set to make the tax system more effective and equitable.
Sri Lanka has obtained an Extended Fund Facility (EFF) of IMF program and the programme rests on a basis of promoting fiscal consolidation to remedy high deficit and public debt through tax base broadening, management of public expenditure and improving Sri Lanka’s external resilience.
The declaration from IMF is a resounding statement that restores and validates the growth of the Sri Lankan economy. Despite less than expected growth rates being achieved Sri Lanka is still on course to recover and grow year on year. The drought which was one of the worst in recent years memory, caused the downturn and yet the economy has managed to suffer no long-term downturns.
With the additional programmes and legislation also expected to contribute to raise Sri Lanka’s fiscal management, it can be expected Sri Lanka to enter into a phase of rapid growth especially in the year 2018.
|Article Code :||VBS/AT/16082017/Z_1|