Lankan economy on the correct track
Sri Lanka’s economy has improved and is on track with a 4-5 per cent growth rate expected for 2018 due to prudent policies adopted by the Central Bank (CB), IMF Mission Chief for Sri Lanka, Manuela Goretti said speaking at a video press conference from Washington on Wednesday on the fund’s Extended Fund facility to Sri Lanka. The event was held at the World Bank office at the DFCC Bank, Colombo 3.
She said the CB has effectively curbed credit growth and stabilised inflation, despite recent pressures. However the economy remains vulnerable to adverse domestic and external shocks, given sizable public debt, large refinancing needs and low external buffers. Referring to Sri Lanka’s exchange rate she said it should be allowed to adjust to global market conditions.
Commenting on the CB monetary policy, she said adjusting the fuel price mechanism was a landmark step where gasoline and diesel prices were aligned with market prices, which had not being done for a long period of time.
Meanwhile the Staff Report of the IMF Executive Board released on June 1 states that the authorities have achieved major milestones in their reform agenda that includes the launch of the new Inland Revenue Act, and progress with SOE and energy–pricing reforms as well as adoption of the CB’s Roadmap to flexible inflation targeting. Economist of the Resident Representative Office of the International Monetary Fund Sri Lanka and Maldives, Amitha Sundararaj was present on the occasion.