Sri Lanka’s Central Bank says tax revisions would support lower inflation and higher economic growth
The Central Bank of Sri Lanka (CBSL) has reportedly stated that the recent tax revisions would support lower inflation and higher economic growth in the short term.
However, the Bank has noted that greater clarity with regard to the medium-term fiscal path of the government is required to assess the impact on the economy over the medium term.
The Monetary Board of the Central Bank has further noted that the economic growth is predicted to be modest during the remainder of the year, with likely subpar growth in Industry and Services activities as implied by leading indicators.
“However, improved investor confidence, supported by political stability and fiscal stimulus driven boost to aggregate demand, is expected to drive short term growth,” the Central Bank has stated.
“The introduction of an appropriate policy mix, which utilises the available limited policy space prudently, would support the economy to reach as well as enhance its potential over the medium term.”
OSL take:
The economic policies of the government of Sri Lanka is expected result in the country’s economy recording a further growth. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region. Foreign businesses/investors could therefore explore opportunities in Sri Lanka.
| Article Code : | VBS/AT/03122019/Z_2 |