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Parliament to introduce key economic bills to strengthen public financial management

May 21, Colombo (LNW): Two significant bills aimed at bolstering the country’s economy will be introduced in Parliament tomorrow (22), announced Acting Finance Minister Shehan Semasinghe.

The “Economic Transformation Bill” and the “Public Financial Management Bill” are designed to enhance the management of public finances, thereby providing a safeguard against future economic downturns.

Speaking at a briefing, Semasinghe emphasised that the legislation originates from the vision of President Ranil Wickremesinghe, rather than being proposed by the International Monetary Fund (IMF).

The new legislation will focus on preserving economic stability and ensuring optimal levels of public financial management to prevent future economic crises, he noted.

The “Public Financial Management Bill” will specifically aim to enhance accountability in managing public finances, aligning with the IMF programme’s requirements, the Minister further explained.

These bills contain numerous technical elements aimed at bolstering confidence in the economy and maintaining the trajectory of the new economic direction implemented thus far.

The Economic Transformation Bill is particularly crucial for the country’s economic growth.

Despite experiencing economic contraction in the second and third quarters of 2023, a notable growth rate of 4.5 per cent was achieved in the fourth quarter.

The bill also addresses essential reforms for international trade, trade agreements, and climate change mitigation efforts.

The legislation outlines the establishment of a new Economic Commission in Sri Lanka, aimed at attracting investments to enhance competitiveness, fostering a conducive environment for investors, expanding international trade, establishing the National Productivity Commission, and developing export-related institutions.

Recently, Parliament endorsed decisions regarding economic transformation. In 2022, the public debt ratio stood at 128 per cent, a figure projected to decrease to less than 95 per cent by 2032.

Similarly, the fiscal requirement, which was 34.6 per cent of the gross domestic product in 2022, aims to be lowered to below 13 per cent by 2032.

Effective debt servicing is paramount, with efforts focused on establishing Sri Lanka as a debt-sustainable nation capable of meeting its obligations.

The goal is to reduce the debt payment ratio from 9.4 per cent in 2022 to below 4.5 per cent by 2027.

The proposed bill will outline specific national goals and actions to address economic challenges, providing a roadmap for sustainable economic growth, debt management, and economic governance.

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