Inflation in Sri Lanka will come down to around 10% towards the end of next year, former Governor Central Bank Dr. Indrajit Coomaraswamy told the CT CLSA hosted Annual South Asia Frontier Forum held in Colombo yesterday.
He also predicted that the interest rates too would stabilize towards the end of the year. Coomaraswamy said this is because Sri Lanka has done well in economic stabilization. The former governor commenting on reforms said that Sri Lanka should embrace them not only because the IMF suggests doing so, but as measures that should be taken because the county will hugely benefit from them. He said that Sri Lanka has gone to the IMF before when the country’s economy was overheating but now it is seeking IMF assistance when Sri Lanka is having a negative growth. “Hence implementing economic reforms is the last chance Sri Lanka has for economic revival.” He also said that the country should fall back to maintaining a flexible exchange rate as early as possible.
“Also a data driven monetary policy too should be looked at.”
Economist Anushka Wijesinghe said that Sri Lanka should look at maintaining and improving on the present FTA agreements that could bring many economic benefits.
“We saw that there were several Austrian companies who wanted to set up manufacturing facilities in Sri Lanka for re-exports to India using the FTA.”
Meanwhile, funding CEO Ceylon Brewery, Chairman Ceylon Tobacco and head of State-owned Enterprise (SOE) Restructuring Unit Suresh Shah said reforms should be done not because the IMF suggested it but because Sri Lanka would benefit from it. “SOE reforms are talked about on many occasions and though steps are taken to restructure them practically nothing happens.
“This time around SOE reforms have become a top priority in the country’s agenda and if reforms are not done this time, the subject will come up again in five years. This proves that the SOE reforms are needed.”
Shah taking Sri Lanka Ports Authority (SLPA) as an example said that State institutions should not play a dual role of a commercial operator and a regulator. He however said that fundamental responsible organizations of the government, such as national security, law and order and regulatory implementing bodies should always remain with the government. “The Government should understand their priority areas and allow the ‘running of businesses’ to be given to the private sector.”
He however said that for SOE reforms support from all diversified business and civil communities were needed and although listed companies present their annual accounts quarterly and yearly SOE’s do not perform this as well.
Add new comment