Sri Lanka ready to regain growth momentum says President’s Secretary
Sri Lanka’s Presidential Secretary, Dr. P.B. Jayasundera has reportedly assured global investors that Sri Lanka has put in place policies and strategies to unleash its next wave of high yet sustainable growth, despite challenges such as the pandemic.
Delivering the keynote at the virtual three-day Sri Lanka Investment Forum’s inauguration, Dr. Jayasundera has been quoted as saying that the Covid-19 pandemic hit Sri Lanka at a time when the President Gotabaya Rajapaksa Government was preparing to reinvigorate a badly run economy during 2015-2019. He said economic growth slumped to 2.3% in 2019 from 5% in 2015.
“We have been averaging 5-5.5% growth during the 30-year conflict and grew around 7-8% post-conflict, which confirms Sri Lanka’s potential and resilience,” Dr. Jayasundera has been quoted as saying in the Daily FT.
According to the President’s Secretary, a weakened economy in 2019 was further impacted by Covid leading to a 4% contraction in 2020 and this was despite several initiatives carried by the new Government, such as tax reforms, public expenditure reforms, and stepped-up public investment strategies.
“Benefits of these measures were overshadowed by the COVID impact, whilst there was higher public health expenditure as well,” he has explained.
However Dr. Jayasundera has told investors that “Sri Lanka is ready to regain the growth momentum it lost since 2015”.
He has further noted that the national goal is to push per capita income towards US$ 10,000 in order to consolidate as an advanced middle income country as opposed to present level of US$ 4,000. “This will be driven by structural changes in exports and imports of goods and services to make it much more diversified and inclusive,” he has said, adding that on average the national growth target in GDP is in excess of 6%.
Noting that Sri Lanka cannot sustain a US$ 10 billion trade deficit with exports being US$ 10 billion and imports amounting to US$ 20 billion, Dr. Jayasundera has noted that the government of Sri Lanka has announced a host of measures to boost exports to US$ 12 billion this year and US$ 15 billion by 2024 and US$ 20 billion by 2028. The targets will be achieved via export diversification and greater local value addition, he added.
“Export performance year-to-date is encouraging and gives us confidence of achieving the goal of $ 12 billion by end 2021,” he has observed.
Dr. Jayasundera has also said it was the COVID impact, which compelled to enforce import restrictions, but that those need to be gradually relaxed as imports will be needed and likely to grow to US$ 22 billion by 2024/25.
He has told global investors that they can count on the strength, capability and resilience of the Sri Lankan business community, which has invested considerably as well as captured global markets.
Dr. Jayasundera has reportedly highlighted what has been described as the government’s landmark achievements which global investors should take confidence from. One was the finalisation of the US$ 700 million BOT deal on the Colombo West Port Terminal involving India’s Adani and Sri Lanka’s John Keells Holdings.
The other is drawing a US$ 800 million investment from China Harbour for the elevated highway connecting Kelaniya and Athurugiriya.
The government of Sri Lanka is committed to improving the country’s position in the ease of doing business index in order to make it an attractive business/investment destination in the South Asian region. Sri Lanka’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country have helped the island poise as a business/investment destination in the region. Sri Lanka’s manufacturing and exports sectors continued operations through the Covid 19 lockdown last year as well as the travel restrictions at present. Therefore Sri Lanka’s economic expansion is on a positive path opening up many opportunities in the process.
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