January 6, 2023
2 mins read

SL central bank expects economy to recover gradually in H2 2023

The central bank said that structural economic impediments that existed across various spheres of the economy over decades were compounded by economic shocks, along with ill-timed policy choices….reports Asian Lite News

The Central Bank of Sri Lanka said that the country’s economy plagued by the worst-ever crisis since independence that has plagued the island nation since early 2022, is expected to recover gradually from the second half of this year.

The central bank announced its monetary policies for 2023 on Wednesday, saying that rapid acceleration of inflation that began from early 2022 turned around in October, reports Xinhua news agency.

“The Sri Lankan economy, which is projected to register a real contraction of around 8.0 per cent in 2022, is expected to record a gradual recovery in the second half of 2023 and sustain the growth momentum beyond,” the bank said.

The central bank said that structural economic impediments that existed across various spheres of the economy over decades were compounded by economic shocks, along with ill-timed policy choices.

As a result, the government and the central bank implemented painful, but unavoidable policy measures in 2022, aimed at restoring macroeconomic balance.

The monetary policy was tightened by an unprecedented adjustment in interest rates to prevent inflationary pressures from worsening while arresting any adverse inflation expectations in the near to medium term.

A temporary suspension of selected foreign debt was also announced amidst the dire foreign exchange shortage, while measures were adopted to consolidate public debt with the envisaged support from an extended fund facility arrangement from the International Monetary Fund.

The central bank said these measures ensured the availability of foreign exchange for essential imports, including fuel, coal, cooking gas, medicine, and food items, among others, thereby relieving socioeconomic unrest to a greater extent.

Earlier, UN Assistant Secretary-General and United Nations Development Program (UNDP) Regional Director for Asia and the Pacific Kanni Wignaraja assured Sri Lanka with UN’s financial and technical support as the South Asian island country attempted to recover from an economic crisis.

Wignaraja made the remarks on Wednesday at a meeting between Sri Lankan President Ranil Wickremesinghe and a delegation he headed, Xinhua news agency reported, citing the President’s Media Division.

The UN official appreciated the efforts taken by President Wickremesinghe and his government in resolving the economic crisis in the country.

“Wignaraja reiterated the UN’s financial and technical support for Sri Lanka during this recovery period,” the President’s Media Division said.

The discussions focused on economic reforms, with the delegation recognizing difficult decisions would have to be taken in order to ensure long-term recovery and growth in the country.

ALSO READ: India ‘very keen’ to streamline emigration processes

Previous Story

Beijing starts winter tourism campaign in Tibet amid Covid

Next Story

Amazon to slash 18,000 more jobs

Latest from -Top News

Trump Lashes Out Over Fragile Truce

Trump mentioned that both countries “violated” the ceasefire that was announced late Monday….reports Asian Lite News US President Donald Trump on Tuesday issued a stern warning to both Israel and Iran, accusing

Global Brands Linked to Uyghur Labour Abuse

Labour rights experts warn that global brands are failing to account for the realities of their operations…reports Asian Lite News A recent investigation by The Bureau of Investigative Journalism has found that

Jaishankar Pays Tribute to Kanishka Victims

Jaishankar emphasised that the anniversary of the attack is a “stark reminder of why the world must show zero tolerance towards terrorism and violent extremism.”….reports Asian Lite News On the 40th anniversary

Taliban Severs Oil Deal with China Amid Growing Friction

Several countries have recently withdrawn from Chinese-funded infrastructure and resource deals, citing quality concerns, lack of transparency, and limited benefits for local populations….reports Asian Lite News The Taliban has cancelled a $540

Qatar Summons Iran Envoy Over Base Strike

Qatar’s Ministry of Foreign Affairs affirmed to Iranian Ambassador Ali Saleh Abadi that it reserves the right to respond to this flagrant violation in accordance with international law. Qatar on Tuesday summoned
Go toTop

Don't Miss

China Blocks IMF Deal as Sri Lanka Tilts Westward

If China opts out of the deals to provide support

Lanka Premier League 2022 to start on December 6

Asia Cup, set to begin on August 27, was also