Six percent GDP growth expected in 2022 – Cabraal
“We were anticipating posting a 5% growth rate for 2021 but failed to achieve this target mainly due to prolonged lock downs of 66 days.”
He disclosed that this 4.5% growth is being achieved while undertaking a economy that was ruined due to short term economic policies and also investing over USD 100 million for C-19 vaccinations, successfully servicing debt, investing on infrastructure developments, offering several moratoria and fulfilling other obligations. He said that the USD one billion financial obligation is due at the end of this month and this would be settled using some of the reserves and other financial tools.
“Out of the USD one billion USD 300 million is from local instruments and when this is settled this sum would come back to Sri Lanka.
The reserves will also be boosted up to the original position with several country to country credit schemes, Central Bank to Bank swaps and other financial tools.’’ He said that from next year they hope tourism will pick up and the economy will also be boosted up with several investments via the Colombo Port City, Hambantota industrial and Pharma Zone and several other similar projects.
Commenting on the rupee devaluation he said that the previous government depleted the Sri Lanka rupee from Rs. 131 to Rs. 185 and the rupee will stabilize soon. Cabraal also said that the much anticipated GSP Plus concession loss would not have a major negative impact to the economy as Sri Lanka has survived minus this concession, previously even fighting a war with the LTTE.
He said that EU exports, which was Euro 2,875 million while the GSP plus was in place, shot up to 3,576 and 3,228 in 2011 and 2012 minus GSP Plus.
“The government is not too keen to bend their head to some of the unjustifiable conditions put forward to retain the GSP Plus.”
He said though several economic pundits including the opposition and even JVP suggesting to engage with the IMG also will result in Sri Lanka having to bow down to several conditions like rising interest rates, privatizing State properties and slimier conditions.
Commenting on the rating he said that Sri Lanka currently has a ‘CCC’ rating and steps are taken to improve on this.
Asked if there are moves to curtail import of electronic items he answered in the negative.
“We took some harsh decisions to stop motor vehicle imports which have spurred a new local motor assembly and component manufacturing industry.”