Sri Lanka policies to boost domestic production in spotlight

COLOMBO:  Sri Lanka’s economic growth is expected to rebound in 2021, and maintain the upward trajectory over the medium term, supported by pro-growth policies of the government, according to a report.

The Central Bank of Sri Lanka released its report on ‘Recent Economic Developments: Highlights of 2020 and Prospects for 2021.’

Policies to boost domestic production are also expected to ease the pressure on the external sector of the economy on a sustained basis, said the report.

Nevertheless, it said, the success of containing COVID-19 locally and globally remains critical in determining the pace and the magnitude of domestic economic recovery and revival in the period ahead.

Subdued demand conditions and well anchored inflation expectations helped maintain inflation broadly within the target range of 4 percent-6 per cent thus far during 2020, although a transitory acceleration was observed due to the rise in food prices.

Inflation is expected to be maintained in this range over the medium term with appropriate policy measures, within the flexible inflation targeting framework of the Central Bank, said the report.