IPS releases its ‘Sri Lanka: State of the Economy 2008’ report
The State of the Economy report is an annual publication of the
Institute of Policy Studies of Sri Lanka (IPS). The report provides an
assessment of Sri Lanka’s economic performance in 2007/08 and comments
on the outlook in the context of developments in the global economy. The
report also highlights topical issues of medium-term policy relevance
for the Sri Lankan economy.
The 2008 report notes that while the Sri Lankan economy has been
performing creditably to post an annual average growth rate of 6.9 per
cent during 2005-07, higher growth has also been accompanied by a
weakening of macroeconomic stability.
Despite a much tighter monetary policy stance adopted in 2007, the
lagged effects of past excesses in monetary aggregates - and cost push
effects from price increases in fuel and food - have ensured a
continuation of inflationary pressures into 2008.
Whilst a sharp drop in credit growth is expected to moderate
inflationary pressures to an extent in the immediate short-term, the
medium-term outlook for price stability will hinge critically on Sri
Lanka’s fiscal policy stance.
In this regard, the report highlights the need to watch the future
path of debt management in Sri Lanka. Increased recourse to foreign
currency denominated debt borrowed on commercial terms not only exposes
the economy to higher risks, but also complicates monetary policy and
exchange rate management.
The report notes that external sector developments need to be given
careful consideration in view of an anticipated deterioration in the
global economic environment during 2008/09.
The report also highlights emerging socio-economic issues in key
areas of medium-term policy relevance for Sri Lanka. Taking the
political economy dilemma of institutional change and reforms as a
theme, detailed analyses of related topical debates currently facing the
Sri Lankan economy are taken up.
These include:
* the political economy dilemma of reforming state-owned enterprises
in Sri Lanka,
* addressing the delivery of basic services to bridge emerging
inequities as evidenced from an analysis of the Household and Income
Expenditure Survey of 2006/07,
* the pros and cons of adopting different public-private partnerships
in the provision of education services in Sri Lanka,
* the rationale for reforms in the energy sector in view of
escalating international oil prices and concerns regarding climatic
change,
* the impact of ‘foodflation’ and attendant reforms to the
agriculture sector in Sri Lanka,
* sustaining economic growth through services sector reforms, and
* the challenges of implementing effective fiscal decentralization
under the 13th Amendment.
More details of the report could be obtained from the IPS website
www.ips.lk |
