Colombo, March 6: Making a special statement in Parliament, President Ranil Wickremesinghe yesterday emphasised that the revival of the country’s economy began in the third quarter of 2023.
He highlighted that international financial institutions have projected a growth rate of 2 percent to 3 percent for the year 2024.
“Our economy, which experienced consecutive contractions for six quarters from 2022 to the second quarter of 2023, began to show signs of recovery from the third quarter of 2023 onwards,” the President added.
He also said that State revenue saw a significant increase of over 50 percent in 2023 as against 2022.
The President stated that a surplus was achieved in the primary account last year. “Consequently, all outstanding payments owed to contractors who had rendered services to the Government for three to four years, were settled.”
He highlighted that through coordinated macroeconomic demand management endeavour by the Central Bank and the Government, inflation has plummeted from 70 percent in 2022 to 5.9 percent in February 2024, offering respite to SMEs and consumers. “Additionally in 2023, inflation reached 30 percent and excessive interest rates have been curtailed to below 10 percent.”
He added that the usable foreign exchange reserve, which stood at less than US$ 20 million in mid April 2022 has surged to over US$ 3 billion. He also stated that import restrictions except for private motor vehicles have been lifted.
The President noted that in 2023, for the first time since 1977, both the balance of payments and current account will show a surplus. Additionally, he highlighted that the US dollar which stood at Rs. 363 last year has depreciated to approximately Rs. 308 as of yesterday resulting in a strengthening of the rupee.
The President also announced the exemption of items such as books, school supplies, medicines and health equipment from the VAT list.
He expressed his aspiration to secure temporary relief from debt payments spanning from 2023 to 2027. He emphasised his commitment to diligently repaying the debt within the timeframe of 2027 to 2042.
“During the initial eight months of 2022, the collective loss of 57 major state-owned enterprises amounted Rs. 727 billion. Reflecting on this, the President remarked that by the same period in 2023, this figure would transform into profit of Rs. 313 billion, signifying a notable turnaround.
“The successful outcome of the debt restructuring negotiations will diminish the annual external debt payment from 9.5 percent to 4 percent of the GDP. Additionally, if the economic growth experienced in 2022 and 2023 persists, the government revenue can be maintained at a substantial level.” The President emphasised that under these circumstances debt servicing will not impose a burden on the country. The President added that the under the initiative to expand the tax network, the total number of tax files has surpassed one million in 2023. He further stated that printing of money has been completely halted.
The President highlighted that two million families will attain ownership of freehold land deeds through the Urumaya programme. He also emphasised that 2.4 million low-income families will receive relief with tripled social security benefits aimed at safeguarding the poor and vulnerable from the impacts of the economic crisis.
He added that approximately 4.5 million schoolchildren will reap the benefits of the Suraksha health insurance ecosystem.
The President also said that development initiatives have commenced in thousands of villages across 89 Divisional Secretariat divisions as part of the Kandumara Dashakaya programme. Each Divisional Secretariat has been allocated Rs. 100 million for this purpose.
He emphasised that the advantages of the growing economy will be extended to all segments of society, ensuring equitable distribution throughout.
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