Spotlight: Econ Op-eds in Summary (Week ended 20th November '19)
1. Formidable economic challenges for new President
By: Nimal Sanderatne
· The newly elected president will face formidable economic challenges caused from the fundamental macroeconomic weaknesses of the economy. Political stability and peaceful conditions are vital pre-requisites to be ensured for economic development. Sound economic policies should be carried out irrespective of the election promises made.
· Large scale foreign borrowing and further burrowing to service those borrowings has increased our external financial vulnerability. Improving the BOP is essential in overcoming this. While a BOP surplus is expected for 2019, much higher export growth is vital in sustaining this in the longer term. Policies that encourage manufactured, agricultural, ICT exports, alongside new export sectors, are important.
· Reduction of the high public debt levels through reducing fiscal deficits also remains key. Political compulsions have derailed fiscal consolidation processes in the past. Means of curtailing government expenditure while enhancing government revenue should be explored. Certainty of such economic policies is vital to generate business confidence and attract FDI that would drive economic growth.
(Compiled by: Chayu Damsinghe & Asel Hettiarachchi)