Sri Lanka’s 2023 budget aims at economic stabilization

Colombo, Nov 14 (EFE).- Sri Lanka President Ranil Wickremesinghe — who also serves as the finance minister of the crisis-hit nation —presented the 2023 budget on Monday, aiming to stabilize the economy even as the island awaits an IMF loan of $2.9 billion.

“Inflation could be controlled to some extent due to the actions taken in the recent past. Similarly, the rupee is strengthening. We expect to sustain these developments. I am confident that by moving along the same path, we will be able to stabilize the economy within the next year,” Wickremesinghe said.

Some of the measures taken so far include the introduction of a fuel quota system and price controls.

The country is also considering privatizing loss-making state companies, including its national airline.

The president noted that the “fiscal stabilization program envisaged government revenue increasing to around 15 percent of GDP by 2025 from the 8.3 percent at the end of 2021.”

In addition, the government aims “to reduce public sector debt from around 110 percent of GDP at the end 2021 to no more than 100 percent of GDP in the medium term.”

Wickremesinghe said the government expected to achieve an economic growth rate of 7 to 8 percent in 2023 through a “social market economy” based on reforms and modernization.

The government would also seek international trade to go up by 100 percent, an annual growth of $3 billion from new exports from 2023 to 2032, a foreign direct investment of more than $3 billion in the next 10 years, and the creation of a highly qualified workforce in the next decade.

“We must achieve rapid economic growth. The entire potential of the country should be tapped … Education and health, agriculture, and marine resources, industry, trade, investment, defense, must all be modernized,” he said.

The president stressed that the country must carry out the socioeconomic transformation taking into account the global phenomena.

He stressed special attention must be paid to climate change.

The president also shared his plans to establish an International University for Climate Change.

Sri Lanka is in its worst economic crisis since independence, with fuel and food shortages forcing people to live on fewer resources. Inflation in the country exceeds 66 percent.

The IMF has announced a preliminary agreement for the granting of an urgent rescue program of around $2.9 billion to Sri Lanka.

The crisis sparked protests across the country that forced the then-president Gotabaya Rajapaksa, accused of corruption and ineffectiveness, to flee.

Wickremesinghe was elected subsequently. He was also one of the main players in the negotiations with the IMF.

“We are doing these reforms and reorganizations to build a new economy. It is a need of the country. Something that the country needed for a long time,” Wickremesinghe said. EFE

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