By: Staff Writer
March 04, Colombo (LNW): As Sri Lanka moves from economic stabilization to growth following its 2022 crisis, the private sector must enhance resilience through financial discipline and strategic investments, says CBSL Assistant Governor Dr. Chandranath Amarasekara.
While macroeconomic policies ensure stability, businesses must strengthen governance, competitiveness, and efficiency. Economist Talal Rafi emphasized that economic growth depends on government policies, not the IMF, highlighting the need for digitalization and innovation-driven industries.
The private sector bears a crucial responsibility in ensuring long-term economic stability. By fostering sustainable business practices, investing in emerging sectors, and collaborating with policymakers, corporations can drive sustained economic progress, making Sri Lanka’s recovery resilient and inclusive.
As Sri Lanka transitions from economic stabilization to accelerated growth following its 2022 financial crisis, the private sector must play a crucial role in ensuring long-term resilience and sustainable development. While the Central Bank of Sri Lanka (CBSL) has helped restore stability through monetary measures, the next phase of economic growth will depend on structural reforms and private sector-driven initiatives.
CBSL Assistant Governor Dr. Chandranath Amarasekara emphasized the importance of continuing macroeconomic policy reforms to prevent future crises.
He noted that while CBSL has contributed significantly to stabilizing inflation and lowering interest rates, sustainable economic expansion must be driven by productivity, competitiveness, efficiency, and governance.
He urged corporations to build financial buffers, strengthen resilience, and maintain discipline in managing balance sheets to navigate global economic uncertainties.
Following the economic downturn, CBSL has successfully reduced interest rates, with treasury bill rates for 91-day securities declining from 33% to 5%, and the prime lending rate dropping from over 30% to 8.4%.
These improvements create a favorable business environment, but the private sector must leverage these conditions to drive growth.
Economist and Ernst & Young (EY) Sri Lanka Director Talal Rafi reinforced the necessity of a robust private sector, clarifying that institutions like the International Monetary Fund (IMF) serve primarily to stabilize economies in distress rather than directly fuel growth. He compared the IMF’s role to an Intensive Care Unit (ICU) in a hospital, which stabilizes critical patients but does not ensure long-term health.
Rafi emphasized that domestic growth must take precedence, alongside external trade expansion. He advocated for increased investments in digitalization and high-potential industries to secure long-term economic prospects.
With Sri Lanka targeting $19 billion in export revenue by 2025, he stressed the importance of shifting from traditional economic models toward innovation-driven industries. This transformation requires collaboration between the private sector and academia to foster research and development.
Additionally, Sri Lanka’s low GDP-to-revenue ratio, projected to struggle even at 15%, calls for progressive taxation policies rather than temporary revenue measures like vehicle taxes. Long-term fiscal stability will depend on sound economic policies that support private sector-led growth.
As the country moves forward, a strong, innovative, and resilient private sector will be the key driver of economic expansion, complementing government policies and ensuring sustainable development.
