Srilanka

Prime Minister Mahinda Rajapaksa is currently holding discussions with his Indian counterpart Narendra Modi.PM Rajapaksa was accorded a warm welcome by PM Modi in a ceremonial reception at the Rashtrapati Bhawan.According to Indian media reports, the two leaders are discussing ways to expand bilateral ties between the two countries including in areas of defence and security.Upon his arrival in New Delhi last evening (07), the Premier was received by Indian Minister of State for Human Resources Development Sanjay Shamrao Dhotre.

Consumer Affairs Authority (CAA) Director General M.S.M.Fawzer stated that the government has reduced the prices of more than 15,000 varieties of goods in the market, giving benefits of tax concessions to the consumers.The Director General further said that around 80 companies have already informed the Consumer Affairs Authority (CAA) in writing about the price reduction of their products.&The prices of electrical items, jams, cordials, biscuits and chocolates, building construction equipment, soaps, baby items, soft drinks and several other items have been reduced by the government as a result of the tax concessions,& Director General Fawzer said.The Director General further pointed out that they will take necessary steps to inform the public about these price reductions through newspaper advertisements and the publishing of posters near retail the sellershops.

The Sri Lankaeconomy is recovering from the terrorist attacks last April, with GDP growth projected at 3.7 percent in 2020, the International Monetary Fund (IMF) said after concluding staff visit to Sri Lanka.The statement also said that &Ambitious structural and institutional reforms are needed to anchor policy priorities, bolster competitiveness and foster inclusive growth in Sri Lanka.&&Fiscal prudence remains critical to support macro-economic stability and market confidence, amid high levels of debt and refinancing needs.& It said.The staff team from the IMF led by Manuela Goretti visited Colombo during January 29 & February 7, 2020 to meet with the new administration and discuss its policy agenda. At the conclusion of the staff visit, Ms. Goretti issued the following statement:

&The IMF staff team had constructive discussions with the Sri Lankan authorities on recent economic developments and the countryeconomic reform agenda. Given the high level of public debt and refinancing needs in the country, ensuring macroeconomic stability calls for fiscal consolidation, prudent monetary policy, and sustained efforts to build international reserves. Ambitious structural and institutional reforms remain critical to raise the countrygrowth potential and promote inclusiveness.

&The economy is gradually recovering from the terrorist attacks last April. Real GDP growth is estimated at 2.6 percent in 2019. The recovery is supported by a solid performance of the manufacturing sector and a rebound in tourism and related services in the second half of the year. High frequency indicators continue to improve and growth is projected to rebound to 3.7 percent in 2020, on the back of the recovery in tourism, and assuming that the Novel Coronavirus will have only limited negative effect on tourism arrivals and other economic activities. Inflation is projected to remain at around 4½ percent, in line with the Central Bank of Sri Lanka (CBSL) target. After a sharp import contraction in 2019, the current account deficit is expected to widen to nearly 3 percent of GDP in 2020.

&Preliminary data indicate that the primary surplus target under the program supported by the Extended Fund Facility (EFF) was missed by a sizable margin in 2019 with a recorded deficit of 0.3 percent of GDP, due to weak revenue performance and expenditure overruns. Under current policies, as discussed with the authorities during the visit, the primary deficit could widen further to 1.9 percent of GDP in 2020, due to newly implemented tax cuts and exemptions, clearance of domestic arrears, and backloaded capital spending from 2019. Given risks to debt sustainability and large refinancing needs over the medium term, renewed efforts to advance fiscal consolidation will be essential for macroeconomic stability. Measures to improve efficiency in the public administration and strengthen revenue mobilization can help reduce the high public debt, while preserving space for critical social and investment needs. Advancing relevant legislation to strengthen fiscal rules would anchor policy commitments, restore confidence, and safeguard sustainability over the medium term.

&The CBSL should continue to follow a prudent and data-dependent monetary policy and stand ready to adjust rates to evolving macroeconomic conditions. Net International Reserves fell short of the end-December target under the EFF-supported program in 2019 by about $100 million amid market pressures after the Presidential elections and announced tax cuts. However, conditions have since stabilized. Renewed efforts are needed to rebuild reserve buffers to safeguard resilience to shocks, under a flexible exchange rate. Approval of the new Central Bank Law in line with international best practices is a critical step to further strengthen the independence and governance of the CBSL and support the adoption of flexible inflation targeting.

President Gotabaya Rajapaksa met protesting members of the All-Island Dengue Prevention Assistants& Union at the Agitation Site allocated in front of the Gall Face Green yesterday. The President listened to the protesters& demands and assured to provide them with job opportunities through the Multi-Purpose Development Task Force set up recently by him to create 100,000 new jobs. Nearly 1,300 protesters were engaging in this protest from Thursday (6) demanding the confirmation for their present jobs. President Rajapaksa is the only leader to meet these employees since 2017 and listen to their demands.