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World Bank recommends faster implementation of reforms

The government led reforms to improve competitiveness, maintain macro-fiscal stability and strengthen institutions, with broad support in the country, are key to robust economic growth, job creation and poverty reduction, a World Bank report released today underscored.

The new Sri Lanka Development Update (SLDU) of the World Bank, a half-yearly report on the Sri Lankan economy and its future directions, noted that despite significant challenges posed by natural disasters, Sri Lanka’s economic performance was satisfactory in 2016 and in early 2017.

The report highlighted the island nation’s few recent landmark achievements, including the passing of the Right to Information Act and the regaining of General System of Preferences Plus (GSP+). The fiscal deficit narrowed from 7.6 percent in 2015 to 5.4 percent of GDP in 2016. The real GDP growth for 2016 slowed to 4.4 percent, as sustained drought took a toll on the agriculture sector.

“The Government of Sri Lanka’s efforts have strengthened growth performance. However, extreme weather among other factors, has hindered the execution of the budget and impacted economic growth and exports performance” said Idah Z. Pswarayi-Riddihough, World Bank County Director for Sri Lanka and Maldives. “While robust contributions from construction and financial services sectors is a good sign, Sri Lanka needs to continue to take forward its reform agenda if it is to adequately boost revenues and provide its people with more and better jobs”.

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