January 02, Colombo (LNW): Finance State Minister Shehan Semasinghe highlighted the positive impact of sustained single-digit inflation on business confidence during a press conference at the Presidential Media Centre titled ‘Collective Path to a Stable Country’ yesterday (01).
In the session, the State Minister revealed that state revenue constituted 11.2 per cent of the Gross Domestic Product (GDP) in 2023, with projections foreseeing an increase to 15 per cent by 2026.
Discussing the economic landscape, Semasinghe indicated an anticipated 1.7 per cent economic growth in the third quarter of 2023, emphasising the significant recovery expected in 2023, projecting an overall economic growth of approximately -3 per cent, a marked improvement from the -11 per cent recorded in 2022.
The primary account balance, negative at Rs. 895 billion in 2022, has now turned positive, standing at Rs. 333 billion as of November 2023, he added.
Semasinghe also shared that the receipt of the second tranche from the International Monetary Fund (IMF) is expected to boost foreign reserves to surpass US$ 4 billion, with the inclusion of contributions from the IMF, Asian Development Bank (ADB), and World Bank (WB).
Maintaining single-digit inflation has played a pivotal role in fostering business confidence, notably reducing from 70 per cent in 2022 to an expected 5 per cent in 2024. This accomplishment is crucial for building trust in the country’s business environment, he emphasised.
In terms of state income, an anticipated Rs. 3110 billion in 2023 is expected to surpass the revised estimate of Rs. 2850 billion, representing 11.2 per cent of GDP. The government ambitiously aims for a 15 per cent growth by 2026.
The number of tax files has shown an upward trend, reflecting positive tax compliance. In 2022, the figure rebounded from 437,547 to a significant milestone of one million, showcasing success in policy implementation.
The government, addressing challenges inherited upon assuming office, effectively settled unpaid bills exceeding Rs. 350 billion. A principled commitment has been established to ensure that payments are not delayed by more than one month, starting from 2024.
In the upcoming year, the government plans to initiate the ‘Aswesuma’ application process at the end of January or the beginning of February 2024. The December instalment for 1,410,064 beneficiaries has already been disbursed, and the government aims to extend these benefits to a total of 2 million people, demonstrating a commitment to effective and targeted support through rigorous efforts to identify eligible recipients and rectify shortcomings observed in the benefits distribution process from the preceding year.
