Economic Overview 2021
- January 22, 2016
- Posted by: LRA
- Category: Publications
How the next five years shape up is critical to Sri Lanka. Being an import oriented economy, the key challenge is to keep the trade gap within a manageable range and keep the wheels of the economy turning despite COVID-19 induced disruptions.
- Stop-Gap financing
The current financial reliefs that the country is using are stop-gap financing methods, and are not long term solutions. Meanwhile, only long term policy decisions can provide sustainable solution to the growing issues of the economy. One of the key matters is to shed off external debt burden and build up foreign reserves. The Government has also indicated that they hope to increase foreign reserves through non-debt sources, and encouraging FDIs to the port city is a way forward for the country.
- Leasing assets
The Government also has initiated the process of leasing under-utilized assets to foreign investors which will give a big boost to FDI. However this will take its own time due to the lengthy government approval process, which the government needs to address considering the current economic scenario.
- IT/BPO sector will be USD~5bn industry by CY25
Considering the services sector, the IT/BPO sector is flourishing, and Sri Lanka hopes to make it a USD~5bn industry by CY25. With the global vaccination rollout, if the COVID-19 could be contained at least by early CY22, Sri Lanka too could be opening up its doors bringing in the much needed foreign currency from the tourism sector.
- Sinking ship?
In conclusion some may ask are we on sinking ship? yes, we are on a ship that has been taking in water for sometime now. The pandemic in the form of a storm has made surviving on this ship very difficult which is a phenomena for the whole world. The saving of the ship depends on the actions taken by the government to steer through the storm to safe waters. It is a challenge, it depends on the cohesive effort not only from the ship’s crew but from the passengers also.