Govt. aims at 3.6% growth in 2021 and 6.6% thereafter - Cabraal | Daily News
To attract US$ 2.5 bn FDI this year

Govt. aims at 3.6% growth in 2021 and 6.6% thereafter - Cabraal

State Minister  Ajith Nivard Cabraal
State Minister Ajith Nivard Cabraal

Sri Lanka will achieve a 3.6% economic growth rate in 2021 and thereafter will maintain a 6.6% growth from 2022, said State Minister of Money & Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal.

Speaking to ‘Daily News Business’ last Thursday prior to his departure to Bangladesh he said that Sri Lanka will achieve this target despite an economic growth rate contraction in 2020 and also successfully battling the COVID-19 Pandemic.

He said that the government offered a host of unbudgeted handouts to the public plus a huge sum spent for vaccination and COVID-19 controls. Despite all these odds they kept the economy going similar to the LTTE terror period where the country achieved an 8.8% growth. Due to the government’s prudent economic management and huge debt service obligation, Sri Lanka will achieve the 3.6% growth in 2021 and 6.6% from 2022.”

The 2021 budget deficit will also be narrowed to 10.8%, from 11.1% last year.

He also said that Sri Lanka settled all its debt obligations for 2020 and this was minus taking any new ‘loans’ which they hoped to maintain in the future too. The Minister Said one of the biggest disadvantages of taking ‘loans’ was that they come with a package of conditions that Sri Lanka don’t want to adhere to, unlike the previous regime.

“We opt for currency swaps, an increase of FDI, borrowing locally and tools in debt service which have proved to be very successful. Sri Lanka also has sufficient reserves to meet all debt obligations,” he said.

Cabraal said the government was looking to attract over US$ 2.5 billion in FDIs this year with most of it coming from the Colombo Port City Development projects.

This is the reason the government opted for a currency swap with China rather than going for IMF loans. Last week China approved a 10 billion yuan ($1.54 billion) currency swap with Sri Lanka. Sri Lanka has debt repayments of US$ 4.5 billion for 2021.