Govt on path to achieve targeted economic growth

by Uditha KUMARASINGHE

The Government's projected economic growth of over eight percent is expected to be achieved with the gradual increase in investment to over 30 percent of GDP and efficiency gains in investment and production from both public and private sectors.

The Development Policy Framework of the Government, which was presented in Parliament recently, pointed out that the macro-economic policy will be directed towards further strengthening the improvements achieved in the recent past.

The overall budget deficit, which will be reduced to below five percent of the GDP in the medium term, will be maintained at that level thereafter with broad revenue efforts and efficiency gains in public expenditure management.

A prudent monetary policy will be undertaken to contain demand pressures in the economy to maintain inflation at single digit levels and stability in external reserves, the policy framework states.

As mentioned in the Government's Development Policy Framework, well-coordinated fiscal monetary cooperation will enable the country to maintain a low interest rate structure and stable exchange rate regime that will be conducive for a rapid expansion in investment and growth. The financial system stability will be strengthened to improve its resilience through further improvement in regulations and supervision.

The external current account deficit will be maintained at a desired level while a competitive, yet stable exchange rate will be maintained, supported by a surplus in the Balance of Payments supporting external stability and sustain Sri Lanka's external competitiveness.