Sri Lanka’s economic downturn will end mid next year and the economy will normalise, falling into a positive growth path, Central Bank Governor Dr. Nandalal Weerasinghe said yesterday. He said that the economic growth rate is expected to be around 3 percent next year.
The Governor also said that the Sri Lanka rupee recorded a year-to-date appreciation of around 11.0 percent against the US dollar.
With significant purchases of foreign exchange from the domestic market by the Central Bank and multilateral fund inflows, Gross Official Reserves (GOR) stood at US dollars 6.5 billion as of end October 2024 and are expected to further increase.
He said that with regard to the IMF programme, the present Government has not made drastic changes to its parameters and has done some adjustments. Asked to comment on the delay in releasing the next IMF tranche, he said it was because of holding two elections.
The Central Bank Governor stressed that it was a myth that the economy will once again collapse when the Government starts to repay debt by 2028. “This is a politically motivated statement and is not true.”
“The people who make this irresponsible statement must understand that the country sought an international debt restarting deal to pay off debt in stages and this can go on till 2040 or even later. “Sri Lanka doesn’t have to pay all its debt in 2028.”
Commenting on money printing, he said that no physical cash was printed (as per IMF agreement) and also there were ample stocks for nearly nine months to replace worn out currency notes.
He also quipped that it is due to this that even his signature is not freely found on currency notes as he took over two years ago.
He said for decades every government borrowed to bridge the budget deficit and this was locally done through by selling and buying Treasury bills and bonds while international borrowing too happened. (See more on Page 11)