Sri Lanka budgets, economic stability improving: State Minister
ECONOMYNEXT – Sri Lanka’s budget are improving, the economy has stabilized and the external sector is strengthening, with foreign reserves rising and exports also picking up after getting GSP+ concessions were restored by the European Union, a minister has said.
“Sri Lanka had its first primary budget surplus in 2017," State Minister of Finance Eran Wickremeratne told a South Asian Investor Conference 2018 in Mumbai.
"The improvements in the economic climate have been reflected in the sovereign ratings by Fitch and Standard & Poor as they upgraded from a negative to a stable outlook."
Sri Lanka has formulated a three year economic program to increase per capital income to 5000 US dollars and create one million new jobs, he had said.
Minister Wikramaratne said on the monetary front core inflation was within targeted levels and the central bank had announced a ‘flexible inflation targeting framework.’
Analysts however had warned that core-inflation had warned that core-inflation may not bring benefits to people because it does not count the real inflation felt by them and drops key items such as energy and food.
The focus on core-inflation has also led to the massive housing bubble in the US, which led to the Great Recession.
Core inflation in Sri Lanka sometimes exceeds the headline inflation and sometimes lags behind, depending on which 12-month period is looked at, critics say.
From the beginning of 2015, when the currency started to come under pressure, Sri Lanka’s headline consumer inflation had risen 17.9 percent, and core-inflation 18.38 percent, with the currency inflating 18.16 percent up to January 2018.