In a recent discussion with the KPMG team, Central Bank Governor Dr. Indrajit Coomaraswamy affirmed that if Sri Lanka continues on this favorable route, the nation can achieve 6 percent development in the next 5-6 years that would obviously enhance the perspective of the banking industry.
Sri Lanka has an output gap and the Central Bank of Sri Lanka (CBSL) is focusing on improving the growth rate as macro-economic stabilization has become crucial while keeping revenue enhancement based fiscal consolidation at the heart of it.
Sri Lanka is prone to external economic shocks as imports remain approximately twice the country’s exports which need to be addressed immediately. There are several key initiatives taken to improve this and the country is beginning to see the improving trend: Sri Lanka has had a surplus in the budget only 3 years since 1955 with two of those years happen to be 2017 and 2018. Dr. Coomaraswamy raised concerns of any undoing of the good work due to political scenarios leading up to the election.
“Our revenue is approximately 14% of GDP which needs to ideally improve to 16-16.5% of the GDP to remain sustainable in the light of our expenditure running at the rate of 20% of GDP,” Dr. Coomaraswamy said.
