Sri Lanka’s Treasury Secretary outlines reforms measures to boost economic outlook
Secretary to Sri Lanka’s Treasury, S.R. Attygalle has reportedly engaged in attracting global investors and companies, showcasing a few major policy reform areas the Government has taken to realign Sri Lanka’s future economic outlook for the better.
He has stated at the Sri Lanka Investment Forum’s inauguration that major reform areas includes fiscal consolidation and revenue mobilisation, trade and investment regime and legal and judicial.
“It is fair to say that this Government is in a hurry to realign the economy into a growth path,” he has been quoted as saying in a Daily FT news report.
He has noted that the new tax policy was investment focused, simple and competitive to facilitate investments in sectors with high potential for growth.
According to Attygalle, the introduction of a new tax policy to stimulate growth and the decision to settle unpaid dues to large and SME companies amounting to almost 3% of the GDP had helped the economy.
“Had that decision not been taken, the economy during this pandemic would have contracted by over 3.6% with the unemployment rate increasing to double digits. The decision helped SMEs to clear their dues to banks and restart their operations,” he has said.
He has also said the public sector will focus on domestic financing, while foreign financing from traditional bilateral and multilateral sources will prevail at around US$ 1 to US$ 1.7 billion per annum.
Noting that debt dynamics have shifted since 2019, Attygalle has stated that foreign currency debt has reduced to almost 42% at the end of 2020 from nearly 50% in 2019, while the public sector debt is expected to be below 75% of the GD by 2025
The Treasury Secretary also said going forward a public investment programme of around 5% to 5.5% of GDP in the medium term will be maintained.
In terms of legal reforms, Attygalle has observed that rewriting of archaic laws, expansion of Commercial High Courts, introduction of Investment Development Court and introducing digitalisation of court procedures are already in the process of being implemented.
Sri Lanka is engaged in an aggressive development programme that will further help the country position as a business/investment hub in the South Asian region. The island’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country will further help boost Sri Lanka’s potential to become a business hub in the South Asian region. Given Sri Lanka’s economic performance despite facing the impact of the global Covid 19 challenges is indicative of the economy’s resilience to external and internal challenges. Foreign businesses/investors could therefore confidently explore business/investment opportunities in Sri Lanka.
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