Sri Lanka has Avoided a ‘crash-landing’ of economy and Instead Turned it into a Soft Landing at a Lower Point says Central Bank Governor Dr.Nandalal weerasinghe

Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe said yesterday (15) that Sri Lanka was able to avoid the crash-landing of its economy, and turn it into a soft landing, but at a lower point.

“If we had not taken those macroeconomic measures, the situation would have been much worse,” he stated.

Commenting on the 2023 Budget presented to Parliament on Monday (14), the CBSL Governor emphasised that this stability could be carried forward with necessary reforms.

Sri Lanka needs to implement Budget proposals and reform measures to start earning crucial foreign exchange to help stabilise its economy and ensure it does not return to crisis, the Central Bank chief said.

The Sri Lankan economy can be turned around by the end of 2023 if Budget policies, which are not limited to the International Monetary Fund’s (IMF) recommendations, are followed, President Ranil Wickremesinghe said in his Budget speech on Monday.

Dr. Weerasinghe, in remarks at a discussion on the Budget, said the situation in the island nation was stable but at a very low point.
“The Budget has to look at what reforms are needed to ensure Sri Lanka remains stable and does not return to crisis,” he said.
“We expect relief from creditors, but in order to convince them to share the burden, we also have to show them that we are taking a share in the burden as well,” he added.

“The next crucial step is to get financing assurances and the IMF programme and additional financial support so Sri Lanka can eventually return to a growth path,” Dr. Weerasinghe said.
He reiterated the need for Sri Lanka to reform its loss-making State-owned enterprises so they stop being a burden on the banks, the Government, and the people.

Secretary to the Treasury and the Ministry of Finance K.M. Mahinda Siriwardana said at the same event that stabilising the economy remained a challenge, and the private sector must perform its role in aiding the Government in pulling the economy out of crisis.
He said the Government was setting up a Presidential Committee to monitor and ensure timely implementation of Budget proposals.
Weerasinghe said Sri Lanka needed to stop depending on debt for its financing requirements and implement measures to bring in foreign exchange.

Addressing chronic fiscal and current account deficits, while also collecting more revenue and maintaining a reasonable level of sovereign debt, were all going to be crucial, he said.
“The economy cannot be reformed overnight. That is a painful process. The next challenge is to implement the Budget according to a timeline,” he added.

Courtesy:The Morning