Sri Lanka growth level satisfactory in 2016 despite challenges: WB

World Bank

The World Bank noted in its report that despite challenges posed by natural disasters, Sri Lanka’s economic performance was satisfactory in 2016, said a statement here on Friday.

The statement from the World Bank on Sri Lanka Development Update (SLDU) said the reforms led by the new government to improve competitiveness, maintain macro-fiscal stability and strengthen institutions, with broad support in the country, are key to robust economic growth, job creation and poverty reduction.

The statement said “The island nation celebrated a few recent landmark achievements, including the passing of the Right to Information Act and the regaining of General System of Preferences Plus (GSP+). The fiscal deficit narrowed from 7.6 percent in 2015 to 5.4 percent of GDP in 2016. The real GDP growth for 2016 slowed to 4.4 percent, as sustained drought took a toll on the agriculture sector.

“The government of Sri Lanka’s efforts have strengthened growth performance. However, extreme weather among other factors, has hindered the execution of the budget and impacted economic growth and exports performance” said Idah Z. Pswarayi-Riddihough, World Bank County director for Sri Lanka and the Maldives.

She said “While robust contributions from construction and financial services sectors is a good sign, Sri Lanka needs to continue to take forward its reform agenda if it is to adequately boost revenues and provide its people with more and better jobs.

In addition to building resilience to meet natural disasters, the report made recommendations including the needs to raise more revenue while controlling current expenditures to bring public debt to a sustainable path.

(Xinhua)