Thrust on development, FDIs in Anura Kumara Dissanayake’s maiden Price range 

Sri Lanka President Anura Kumara Dissanayake delivers his maiden Price range within the Parliament on February 17, 2025. Photograph: X/@anuradisanayake

Sri Lanka expects a 5 % development in 2025 — by bettering productiveness, boosting exports and attracting overseas investments — President Anura Kumara Dissanayake mentioned on Monday (February 17, 2025), presenting his maiden Price range that signalled his authorities’s agency adherence to an ongoing Worldwide Financial Fund (IMF) programme.

Progress can be facilitated by a robust export sector mentioned Mr. Dissanayake, who can also be the Finance Minister. “We anticipate exports of products and providers to achieve an all-time excessive of near $19 billion in 2025.”  

Outlining key financial indicators reflecting relative fiscal stability over the past two years, after Sri Lanka’s unprecedented default in 2022, Mr. Dissanayake mentioned International forex reserves stood at $6.1 billion in December 2024, “surpassing predictions”. Moreover, regardless of issues over forex depreciation, the Sri Lankan Rupee has strengthened to just about LKR 300 (₹ 88.17) per US greenback, he identified.   

Nevertheless, for many Sri Lankans the disaster is way from over. Households are struggling to manage, at the same time as they squeeze their family budgets to satisfy essentially the most important bills, together with meals, schooling, well being, transport, and utility payments.  

Acknowledging the enduring impression of the monetary meltdown, President Dissanayake highlighted excessive value of residing and a fall in actual wages, particularly after inflation soared to 70% in 2022. “Though inflation has since declined, value ranges of many items and providers stay elevated, and revenue development has not stored tempo accordingly, thereby lowering residing requirements of the folks,” he mentioned, unveiling the Price range that outlined improve in minimal wages in personal sector and public sector salaries. Progress for the sake of development has little worth to society except it’s a means to uplifting the lives of all members of society, Mr. Dissanayke mentioned, citing revenue disparity and geographic disparity in incomes. 

Terming the Price range “historic for laying the inspiration for “financial transformation”, Mr. Dissanayake mentioned: “One of many challenges we confronted on the outset was dispelling the mistaken image of us created by the myths and malicious political propaganda in opposition to our financial coverage and imaginative and prescient.”

Commenting on the Price range, famous economist and former Central Financial institution Governor Indrajit Coomaraswamy known as it “protected and sound”. The President “deserves a substantial amount of credit score” for sustaining fiscal self-discipline regardless of the ideological orientation of his [leftist] social gathering, he famous. “The President has demonstrated that he’s a protected pair of arms so far as the economic system is anxious,” he informed The Hindu, including that the 5 % development can be essential for the reversal for sharp improve in poverty in the previous couple of years. Sri Lanka’s poverty charge rose to 25.9 % in 2023, the World Financial institution estimated.

Observing that the Price range was “pragmatic and prudent”, Mr. Coomaraswamy mentioned President Dissanayake had allotted a “truthful quantity” for social welfare, particularly schooling, well being, with out undermining the IMF-prescribed macro-fiscal framework. “The welfare funds are effectively designed, effectively focused.”

Whereas a number of economists hailed the “fiscal self-discipline” envisaged within the Price range, activists working with poor households mentioned it failed to supply reduction from the crushing austerity measures that got here with the IMF programme. The Price range mirrored the constraints positioned by the IMF and didn’t deviate from earlier austerity budgets seen because the financial disaster, the Feminist Collective for Financial Justice contended.

“Half of the expenditure allotted is for debt servicing and the quantity allotted for public funding is negligible,” it famous, nonetheless welcoming the federal government’s dedication to schooling and well being.

“Whereas the price range speech indicated a rise in Aswesuma [welfare benefit], it’s nonetheless throughout the minimal 0.6 % of GDP parameter set by the IMF, which has been repeatedly highlighted as insufficient,” the Collective mentioned. “The Authorities ought to instantly take steps to renegotiate the IMF settlement whether it is severe about bringing Sri Lankans out of the ache attributable to the financial disaster,” it mentioned.