(CT) Fiscal Policy Act remains toothless: Governor

By Mario Andree

Highlighting that the Government’s policy statements and Budget were now in line, Central Bank Governor Dr. Indrajit Coomaraswamy called for the Fiscal Management Responsibility Act to be enforced for the greater good.
Addressing a forum organized by the Sri Lanka Economic Association, he said that, “Sri Lanka has introduced a Fiscal Management Responsibility Act, but the Government is yet to give teeth to it.”

Pointing out the high execution deficit prevailing in the country, he said, “Plans are good, but they need to be implemented.”
Emphasizing the importance of the Act, he said that it would make sure that the country was on track to achieve set goals such as the budget deficit, which is expected to decline to 3.5 per cent of GDP by 2020.

He noted that by enforcing the Fiscal Management Responsibility Act, there would be little chance for the country to deviate from its targets.

Also if such deviation occurs, the Act would make sure the country was to catch up during the next fiscal year.
According to him, some of the reasons for such deviation would include natural disasters, economic recessions, or unforeseen external pressures.

Highlighting that the present regime had achieved somewhat positive results, he said that there was much left to be done for the country to develop.

He hinted the possibility of Sri Lanka’s current account and budget experiencing a surplus next year for the first time in 50 years, given that the interest and capital payments for loans were not considered.
In 2016, Sri Lanka’s budget deficit stood at 5.4 per cent, while the current account deficit stood at 0.6 per cent.

Source: Ceylon Today

Image Courtesy: Daily Mirror