Loan assistance package a welcome move

By Lalin FERNANDOPULLE

The business community welcomes the sanctioning of the loan assistance package from the International Monetary Fund(IMF) which will help bring a much needed macro economic stability and infrastructure development in the country.

Business chambers are optimistic about a fast development of the economy with inflow of foreign aid that will support the country's foreign reserve base and help uplift the level of infrastructure.

Senior Economist, Economic Intelligence Unit, Ceylon Chamber of Commerce, Gayathri Gunaruwan said the Chamber congratulates the government for obtaining the IMF support at extremely favourable terms at this critical point of time. "The Chamber is confident this will boost business confidence and increase private sector investments. The loan assistance will enable the government to strengthen and stabilize the macro economic position and provide a much needed space for the government to bring the economy back to a high growth trajectory", she said.

General Manager/CEO, HNB Stockbrokers (Pvt) Ltd., Deva Ellepola said the foreign assistance is welcome move at a time when micro economic stability is needed and investor confidence is building following the peaceful environment in the country.

"The country faced with a setback due to the three-decade war and now it is the time to accelerate development. Building confidence is vital to attract foreign investments", Ellepola said.

Partner, Gajma and Co. Chartered Accountants, N.R. Gajendran said the governmmet will have to either curb recurrent expenditure or boost revenue which would help avoid a major economic crisis.

"Increasing foreign reserves will put pressure on exchange rates implying other adverse situations for the economy", he said.

The government said it will reduce the budget deficit by seven percent this year and increase achieve over five per cent GDP growth.

Governor, Central Bank, Ajith Nivard Cabraal said economic stability has been restored and expected results of the IMF loan scheme will be delivered.

"We are confident that the required foreign reserve base will be achieved ahead of expected time", he said.

The International Monetary Fund (IMF) sanctioned US$ 2.6 billion, one of its biggest loan disbursements to the government of Sri Lanka to support the country's Balance Of Payments (BOP) and infrastructure development requirements.

Tough economic reforms such as curing budget deficit, reducing petroleum, agricultural, energy sector subsidies and petroleum, agricultural, energy sector subsidies and foreign borrowing and curbing military expenditure were placed as conditions by the IMF in its stand by facility.