By: Staff Writer
Colombo (LNW): The Chamber of Young Lankan Entrepreneurs (COYLE) has suggested the government to look at foreign direct investments with changing state policy decisions to have a more attractive and investor-friendly outlook to attract numerous investors from booming industries.
It was of the view on how the country can take further action to solve the foreign currency deficit by adopting different and dynamic strategies.
COYLE, believes Sri Lanka must look at foreign direct investments with changing state policy decisions to have a more attractive and investor-friendly outlook to attract numerous investors from booming industries.
They urge the Parliamentary Select Committee on Ease of Doing Business to reactivate and pursue proactive steps towards ensuring FDIs are secure in the country without further delay.
The Sri Lankan economy currently grapples with the significant challenges presented by a complex financial situation unfolding in unprecedented ways.
As the country tackles the intricacies of this economic turmoil to overcome fiscal obstacles, there is a prevailing sense of concern among the populace.
Against this backdrop, the nation contends with politically motivated decision-making that bears the marks of a presidential election at the end of 2024.
Despite these existing realities, COYLE remains optimistic about the rising potential through collective efforts and shared objectives driven by the nation’s private sector, aiming to revitalize the economy.
In the present circumstances, positive indicators emerge as macroeconomic policy reforms start showing concrete outcomes, signalling a promising phase of stabilization in Sri Lanka’s economic landscape.
Nonetheless, the path to recovery and inclusive growth relies on maintaining the ongoing momentum of these reforms.
Looking at the recent upgrade of Sri Lanka’s local currency rating from selective default (SD) to CCC+/C by S&P Global Ratings, there is a reflection of a more optimistic view of the country’s solvency.
This upgrade follows the finalization of a domestic debt restructure, including collaboration with superannuation funds (EPF/ETF) and the Central Bank. https://www.fitchratings.com/research/sovereigns/fitch-upgrades-sri-lanka-long-term-local-currency-idr-to-ccc-28-09-2023
The completion of the first IMF review under the 48-month Extended Fund Facility marks a significant milestone, unlocking access to SDR 254 million (about US$337 million) to support the country’s economic policies and reforms.
Notably, Sri Lanka’s performance under the program has been deemed satisfactory, with the majority of performance criteria and indicative targets met by the end of June.
Examining Sri Lanka’s net general government debt, which currently exceeds 100% of GDP and is projected to persist until at least 2028, there are challenges ahead.
It’s noteworthy that Sri Lanka’s Budget for 2024 presents ambitious targets, though they pose challenges, particularly with the projected wider fiscal deficit of 9.1% of GDP.
The government’s focus on achieving a primary surplus, excluding bank recapitalization, aligns with the IMF’s projections.
However, the expenditure target of 22.2% of GDP exceeds the IMF’s envisioned 19.7%. While this discrepancy may raise questions, it also reflects a commitment to ambitious goals, and successful implementation could enhance the budget’s long-term viability and effectiveness.
