Economic growth to turn 1.8% positive in 4Q -2023
Sri Lanka from a negative economic growth rate around 6.8% will record a positive rate in the last quarter to 2023. This would be around 1.8%, said Director. Economic Research Department, Central Bank, Dr. P. K. G. Harischandra.
Speaking at a special post budget session organized by the State Ministry of Finance he said that Sri Lanka had a negative 11.5% in the first quarter and 3.1% in the second quarter in 2023 which averaged around minus 6.8% in the first half.
“Due to the economy bouncing back and other positive sentiments in Sri Lanka, we expect this negative growth to bounce back to around 1.8% in the next quarter and thereafter remain in the positive territory.”
He also said that the inflation which was at around 70% in September 2022 has now come down to around 1% and this too will be under 5% in the future. “Several countries faced huge economic issues due to the COVID pandemic and global rescission but none of these countries have recovered faster than Sri Lanka.”
He attributed this to implementation of new economic policies mostly spelt out by IMF guidelines and also increase of Foreign remittances and additional income generated from tourism.
He said foreign remittances which were at around USD 200 million per month have now increased to around USD 500 per month while foreign reserves which were less than USD 1 billion last year have risen to over USD 3.6 billion.
In addition interest rates too have come down allowing more business to take off. State Minister for Finance Shehan Semasinghe said that though Fitch ratings predicts that revenue targets set by the government are not achievable, all proposals spelt out in the budget would be met.
Semasinghe said the Asian Development Bank is providing them credit and this would be directly channeled to revive the ailing micro and SME sector. “We hope to provide credit for them at a single digit interest rate.”
He also said that they are also following several guidelines laid by the IMF which is taking the country in the right path towards prosperity.