Sri Lanka’s PM notes commitment towards pro-growth policies to drive economy in 2021
Sri Lanka’s Prime Minister Mahinda Rajapaksa has reportedly told parliament that the government was focused on keeping public finances on an even keel, while maintaining a simplified tax system for the private sector to capitalise on positive growth achieved in the third quarter.
The Premier’s statements had highlighted the government’s commitment to continue with its pro-growth policies.
“Sri Lanka’s economy has fared better than many other countries in the world in the wake of COVID-19 in 2020, with an economic growth rate of 1.5% in the third quarter and an overall contraction of 3.9% for the entire year. This was achieved despite the average global economic contraction being 5%,” the Prime Minister had made this statement in response to a question raised by the opposition.
Rajapaksa had said that despite the Covid-19 outbreak in the country in March, the Sri Lankan government has managed to keep the economy afloat and provide the necessary funds for the health sector.
The Premier had further noted the proactive measures introduced by the government, including slashing taxes in late 2019 to meet initial projections of 4.5% growth for 2020, but those plans had derailed due to the pandemic.
The Daily FT quoting Prime Minister Rajapaksa’s speech has stated that the Premier had backed moratoriums and other measures introduced by the Government to assist the private sector, insisting they had helped the economy weather the COVID-19 impact and provided the impetus for growth of 1.5% in the third quarter.
The Prime Minister had noted this was the first positive growth recorded by SL after successive negative growth in both the first and second quarters.
“At a time when the entire world has been derailed by the COVID-19 impact, our Government has worked to improve the business climate and provide support to the economy. As a result, we saw the growth rebound during 3Q and we will continue to provide assistance for swift economic recovery. The focus will remain on maintaining a simplified tax system that companies will find easier to adhere to,” Rajapaksa had said, tabling data on public revenue during last year.
With Sri Lanka’s key economic sectors recommencing operations after last year’s lockdown due to Covid 19, Sri Lanka’s authorities are committed to meeting the targets set out for 2021. Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have placed it in a position to becoming a business hub in the South Asian region. Given that Sri Lanka’s economy has fared quite well amidst the global Covid 19 pandemic, the recommencement of economic activities in full force would definitely enable Sri Lanka to record its targeted growth rates this year. The expansion of economic activities have also expanded business/investment opportunities in Sri Lanka. Foreign businesses/investors could therefore explore business/investment opportunities in Sri Lanka.
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