Sri Lanka is expecting 4 to 4.5 percent economic growth in 2020 and inflation below 4 percent.
Central Bank Governor, Professor. W. D. Lakshman said, “With the revival of economic activity, we expect economic growth to accelerate to around 4-4.5% and inflation to remain below 4% in 2020.
Beyond 2020, with necessary reforms, annual growth is expected to accelerate to over 6.5% while inflation will be managed between 4-6%.”
He said, Sri Lanka hopes to engage with the International Monetary Fund (IMF) and other multilateral agencies while remaining within the framework of national policy, the Central bank Governor, Prof. W.D. Lakshman said on Friday.
In his inaugural speech, as the newly appointed governor, he said, “We need to be watchful of developments in the global economy and financial markets as well. In this context, we hope to engage with the IMF and other multilateral agencies while remaining within the framework of a national policy to ensure that the country reverts to a sustainable path of reserve accumulation a prerequisite for exchange rate stability as well.”
Talking about the current economic situation he said, “In the external sector, sluggish export performance, large trade deficits, persistent current account deficits, dependence on debt inflows in the absence of alternative levels of FDI inflows, as well as high foreign financing needs are major concerns.”
The government is aware of the need for fiscal consolidation and in addressing longstanding issues in the fiscal sector while supporting the revival of the economy. He further said, “This is a time of important changes in Sri Lankan development policy and practice.
Questions are being raised extensively about the validity and relevance of Washington Consensus type or neoliberal type policies to achieve the desired goals of inclusive, sustainable and shared development. This questioning may also apply to Central Banking nowadays.”
He stressed that he was happy to contribute to Sri Lanka’s search for an alternative policy approach to achieve the desired development objectives.
He added the Monetary Board decided to maintain its accommodative policy stance unchanged on Thursday. “We hope to be proactive and the Central Bank will assess the developments in the market and the economy closely, and take appropriate action as necessary to maintain economic and price stability as well as financial system stability, which is our mandated objective, within the overall policy framework of the government.”