Economic turnaround remarkable - Finance Ministry Secretary

*Delay in IMF third tranche of no concern

* Economic outlook dramatically improved

*Improved revenue collection

The Sri Lankan economy has made a remarkable turnaround, Finance Ministry Secretary Dr. P. B Jayasundera told the Daily News. “This is a reflection of the recovery in exports, imports, domestic construction , tourism, manufacturing activities, plantation and agriculture,” he added. “He said the economic outlook has dramatically improved towards the last quarter of the year following the military victory in the North in May last year and global recovery.

“The recovery has also helped the Government to enjoy improved revenue collection in the last three months of 2009.

He said the recovery centric improvement is likely to reduce the deficit to 7.5 in 2010.

Dr. Jayasundera said it can be further improved if the public enterprise performance in key enterprises and improved revenue administration in customs and Inland Revenue.

He added that the economic growth which declined around 2 percent at the end of first quarter of 2009 from around 6 percent in the previous year has bounced back to 6 percent by end of 2009. The 9.7 percent deficit in 2009 was largely due to sustained public investment at 6.5 percent of GDP, reduction in Government revenue due to the global economic downturn and high cost of interest that prevailed till September 2009.

He added that the release of International Monetary Fund’s third tranche will be delayed and the Government is engaging in a dialogue with IMF to promote post war growth prospects in Sri Lanka and use funds to support medium term needs of the country.

The Finance Ministry Secretary stressed that the delay in the release of the third IMF tranche is not a concern at this stage as the country’s international reserves remain at a very high level.

The Finance Ministry Secretary is required to release a report explaining the state of the Government finance within three weeks from the date of proclamation of the election. The report highlights reasons for 9.7 percent budget deficit registered in 2009 and arrangements for the first four months of 2010 under Vote on Account which has been already approved by Parliament and also the fiscal outlook for 2010 which according to the Finance Ministry Secretary’s judgement is likely to be 7.5 percent of GDP in 2010.

The report will be published in the Daily News shortly.