The government has formulated a three-year Economic Delivery Programme to increase per capita income to US 5000 dollars, create one million new jobs, and increase FDI to US 5 billion dollars per year said the Minister of State for Finance Eran Wickramaratne.
He made these comments addressing a gathering of India and South Asia Investor Conference 2018 held in Mumbai, recently.
The Minister on the government’s action plan to achieve these goals said that, many reforms were being implemented, and a multitude of policies had been put into effect to stabilise the economy and to make a conducive economic climate for both domestic and foreign investors. As a result of the efficient management of the economy he said encouraging developments in fiscal consolidation were recorded for the first time since 1954,
“Sri Lanka had its first primary budget surplus in 2017. The improvements in the economic climate have been reflected in the sovereign ratings by Fitch and Standard & Poor as they upgraded from a negative to a stable outlook.” He said
On monetary policy, Mr Wickremaratne said that importantly, core inflation has been well within target levels, and with the Central Bank announcing a move towards flexible inflation targeting framework, inflation expectations in the economy have been well anchored.
The Minister, drawing the attention of the gathering, said Sri Lanka’s external sector has performed well with exports reaching US $11.4B, 10% more than that of 2016, and higher still than the previous best ever of $11.1B in 2014. The two strongest sector growths were seen in tea and fisheries with 20% and 40% increases respectively – benefitting from Sri Lanka’s strategy of gaining market access to Europe through GSP +. The apparel sector will also be a major beneficiary of GSP+.
GSP+: Implemented again in May 2017 and the current regulations will be valid till 2023. There was significant growth seen in industries that export to the EU as a result of GSP+. For example, the average growth rate before GSP+ (2001-04) was 11.5%. During (2005-09) it was 16.4% and between 2010-14 it was 7.4%. It is estimated that since the reinstatement of GSP+, growth in textiles & apparel, and electronics and machinery would be 21% and 28% respectively.