Sri Lanka state finances stronger, investments up, prices stable: Finance Minister
ECONOMYNEXT – Sri Lanka’s state finances have been strengthened, exports and investments have hit new highs, while inflation has been brought to the lowest in 15 months in April, with prices of some foods, was below what seen three years ago, Finance Minister Mangala Samaraweera said.
"While inflation is low, incomes are now higher than what it was three years ago," Samaraweera said.
"There is false propaganda spread about the economy, which is becoming accepted through repetition."
"We have put a good foundation to the economy."
He said the debt had been reduced to 77.6 percent of gross domestic product in 2017 from 78.8 percent in 2016.
The tax take had been increased to 12.6 percent of GDP from 10.4 percent in 2014, while total revenues were at 13.8 percent.
Unemployment at 4.2 percent was the second lowest recorded, he said.
In 2017, the first primary surplus had been recorded in the budget for many decades and they hoped to produce a surplus in the current account, where current spending was below total revenues for the first time in 30 years.
Last year national savings were at 33.9 percent, National investment was at 36.5 percent.
Investments in health, education has been progressively increased over three years, Samaraweera said.
Capital spending has been maintained at about 5 percent of gross domestic product he said.
Salaries of state workers have been raised and basic salary will be double by 2020, he said.
Inflation in April at 1.6 percent was the lowest in 15 months, he said.
He said rice prices were back to the levels seen when the administration came to power. Potatoes were 107 rupees a kilo, now it was around 100 rupees, he said.
Sri Lanka recorded 1.9 billion US dollars of foreign direct investments, the highest in history in 2017 and exports also grew 10.1 percent to 11.33 billion US dollars, another high.
Negative perceptions about economic management may have been triggered by the chaotic budgets of the first two years of the administration and money printing by the central bank which generated a balance of payments crisis, analysts say.
Last year economic growth slowed to 3.1 percent, amid a drought.
After a balance of payments crisis, when lost foreign reserves are re-collected by contracting domestic credit, GDP growth numbers fall, analysts say.
Samaraweera took over the ministry only a year ago. (Colombo/May23/2018)