July 29, Colombo: Sri Lanka's Prime Minister Ranil Wickremesinghe asserted that the country is moving forward with a stable economy.
Addressing a special media briefing yesterday at the Central Bank auditorium, the Prime Minister said the economy has been stabilized despite all the issues including the disastrous weather.
"We are stabilized despite all these issues. I would like to say that the IMF itself has said that in its July meeting that macroeconomic and financial conditions have been stable despite severe weather events and global market volatility," the Prime Minister noted.
"We are on the right track, we are accumulating reserves to increase non-debt creating inflows, particularly through enhancing exports and attracting FDI. We are entering into bilateral economic partnerships. GSP+ means 6000 items enter into the market. Meanwhile the American markets also waived off the duty on travel goods from Sri Lanka," he highlighted.
He said it was possible to stabilize the because of the strong decisions taken by the government earlier to reduce the fiscal deficit, rebuild foreign exchange reserves, introduce a simpler more equitable tax system to restore macroeconomic stability, promote inclusive growth. "Fiscal consolidation has been the key macroeconomic concern," he said.
"We have done this through our tax reforms and prudent public finance management to reduce the fiscal deficit. Our aim is to bring the deficit down to 3.5% of the GDP by 2020," the Premier added.
Mr. Wickremesinghe expressed confidence that the debt burden on the country can also be reduced by a certain amount in 2020.
He also recalled that the Hambanthota agreement which was established during the previous regime was not in favor of Sri Lanka. Therefore, the present government has made amendments to this agreement in order to gain more advantages for the country, he said. The new agreement will pave the way for Sri Lanka to obtain a further 11 billion dollars, he added.
"We are now navigating a period of transformation amidst the global turbulence. Our country has enormous potential. We need not be a country raising commercial debt to pay for infrastructure at government level when we can attract direct private investments, can expand our exports and become a hub of the Indian Ocean," the Premier said.
He said deepening economic relations with India will not destroy local industries. "We want everyone to be competitive," he said.
Foreign Affairs Minister joining in the briefing said not only the government is focused on the Foreign Direct Investment but also to obtain the "diaspora direct investment" since there are lot of Sri Lankans living abroad who are now very keen to invest.
He said the new Inland Revenue Act that is in place will also promote investment as it gives capital allowances to investors.