CBSL governor says 2023 Budget focuses on economic recovery and stability

Nandalal Weerasinghe - Central Bank Governor of Sri Lanka

Dr. Nandalal Weerasinghe. (Photo: CBSL)

The Governor of the Central Bank of Sri Lanka (CBSL) says the Budget 2023 concentrates on recovering the economy and how to stabilize it moving forward.

Joining a special post-budget discussion on Ada Derana 24, Dr. Nandalal Weerasinghe stated that since the beginning of the economic crisis, the focus had been on the short-term measures that would help regain macroeconomic stability and a medium- to long-term economic recovery.

As the economy contracted due to certain policies in the past, the government was compelled to take quick decisions to get out of the crisis to prevent the economy from going deeper into the crisis as any delay could elongate the recovery process, the central bank governor said further.

Speaking on the measures that the government had to take to prevent the economy from crashing, Dr. Weerasinghe said the rising inflation had to be slowed down.

Recalling the situation at the beginning of the crisis, where long queues and extended hours of power cuts were experienced, the central bank governor stressed that the steps they had to take to prevent a crash-landing were of absolute necessity as that there was no other choice left. Had the monetary policy not been tightened, interest rates raised, or taxes increased, the country would have seen inflation skyrocketing above 100 percent, he added.

If we did not stabilize the economy and recover on a long-term basis, we would have been in a different situation, Dr. Weerasinghe continued. Due to the measures that were taken, the economy is now gradually recovering and stabilizing and the majority of small- and medium-scale enterprises (SMEs) are now in operation, he added, admitting that some businesses are however severely affected.

Meanwhile, Finance Secretary Mahinda Siriwardana, who joined the discussion stated that in the 2023 Budget, the government has prepared a path which could consolidate the measures that have already been implemented and strengthen the situation in the country while creating an environment where the economic activities would be taking place.

This budget has proposed the establishment of a Presidential Task Force to follow up the implementation of all budget proposals, the finance secretary said, noting that in the past, there had been very good budget proposals which were unfortunately not put into action. Now the finance ministry and the government are profoundly serious about having a strong follow up of these policies to get the desired outcomes, he said further.

(Source: Ada Derana)