Sri Lankan economy strong, inflation below expectations – Finnance Minister
Sri Lanka’s economy should grow by 7 percent this year, up from 4.5 percent last year, while inflation will end the year far below market expectations, Finance Minister Ravi Karunanayake said on Monday.
Speaking exclusively on a Reuters Global Markets Forum, Karunanayake said Sri Lanka would be able quickly to refinance much of its foreign borrowing at lower cost after next week’s general election.
Predicting a “stupendous victory” for Prime Minister Ranil Wikremesinghe’s reformist government at the Aug. 17 poll, Karunanayake said he hoped to formalise an investor-friendly set of policies after the election.
Commenting on the growth outlook, he said: “I am a born optimist and I am of the opinion we would be able to maintain a rate of around 7 percent.” His comments referred to gross domestic product figures that have been rebased to 2010.
Inflation would be “far lower” than consensus expectations among analysts of 2.7-3.2 percent at the end of the year, he added.
Wikremesinghe’s government has sought to refinance loans taken out under former President Mahinda Rajapaksa to back major investment projects, many of them Chinese led.
Rajapaksa, ousted in a presidential election in January, is campaigning to return as prime minister in an electoral contest that pits his pro-China stance and against the non-aligned position taken by the current government.
“High debt is certainly a major concern but this is a necessary evil we had to inherit,” said Karunanayake, a senior figure in the minority government led by the United National Party that is targeting a parliamentary majority.
Despite opposing the expensive borrowing taken out under Rajapaksa, the government is determined that Sri Lanka is seen as a “financially disciplined nation”. Friendly states have come forward to help Sri Lanka refinance its debts, he said.
“Friendly world nations have accepted us with open arms and on many instances are willing to lend at 0.05 percent 1 percent, as opposed to the previous commercial borrowing which was averaging 2-9 percent,” the minister told the online event.
(Reuters)
Latest Headlines in Sri Lanka
- NPP General Secretary Nihal Abeysinghe’s vehicle falls into Parliament Pond November 27, 2024
- CBSL reduces monetary policy rate, sets 8% overnight rate November 27, 2024
- IMF Chief hails Sri Lanka’s economic reforms as milestones mark recovery November 27, 2024
- 2024 A/L Examination postponed: New dates announced November 26, 2024
- Sri Lanka Defence Secretary graces 53rd Bangladesh Armed Forces Day November 26, 2024
This economic growth must be one of your single handed magic work in 6 months ! Please take all the credit for that. At least the born pessimistic nature during last 10 years has now changed to an optimistic nature. What a turn around at that too! Power (and the poor central bank) can make so many changes.
Quote ““High debt is certainly a major concern but this is a necessary evil we had to inherit,” said Karunanayake, “”
What a turn-around in 6 short months. Now it has become the “necessary” evil rather than the unnecessary evil. Didn’t you come to power saying just the opposite? If that is the case your appointment as the finance minister must be made null and void, because you and your co-horts just cheated the voter to change the regime.
Basically you now hole heartedly accepts the previous regime’s fiance management strategies. Reversal of you opinion on Chinese funded harbour city is another example.
Why not yankees appoint you to the head of the world bank? You turned a bankrupt country (January 8th) to this strong economy within less than eight months (today) !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Hope voters will treat you as you and your You-&-Pooo as deserve in the next election and confine to the political oblivion for a very long time, if not forever for so much lies.
Black Magic ?