Sri Lanka President Calls for High Growth to Quadruple GDP in 20 Years

Colombo (News 1st); President Ranil Wickremesinghe said that Sri Lanka’s recent debt restructuring efforts have provided the necessary breathing space for the country to transform its economy into a resilient and stable one. This pivotal moment, however, must not be squandered, he said.

"This breathing space should not be wasted. In the past, Sri Lanka's economic growth was dominated by the non-tradable sector. During this period, particularly post-war, the economy expanded but tax revenue and exports as a share of GDP declined. The capacity to service debt continued to diminish. To reverse the trend, we must transform Sri Lanka into an economy, where growth is driven by non-debt creating foreign exchange inflows," said the President in a statement to the parliament on Tuesday (2).

The president said that the key drivers of growth must include the export of goods and services, as well as foreign direct investment (FDI).

Wickremesinghe added that the ongoing reforms in fiscal, monetary, and state-owned enterprises are essential to ensure robust fiscal and external buffers. "A combination of strong revenues, and robust foreign exchange balances are critical to ensure Sri Lanka has capacity to service the debt," said the President.

The President said that the Economic Transformation Bill encompasses all these vital elements, and it provides an institutional framework to support the growth of exports and FDI, alongside setting macroeconomic targets that aim to ensure sustainable, inclusive economic growth and continued stability.

He said that effective implementation of the measures in this bill will create the economic conditions necessary for Sri Lanka to fully benefit from the debt restructuring relief.

However, he warned that the failure to implement these measures could mean a return to economic instability, wasting the breathing space afforded by the restructuring.

"But, a failure to do so will mean that we will fall back into trouble and the breathing space provided by debt restructuring will go to waste," he said.

The President said that Sri Lanka must now pursue a high growth trajectory of at least seven percent GDP per annum, and though ambitious, this target is achievable, as demonstrated by nations like Vietnam.

Achieving two decades of seven percent growth could potentially quadruple Sri Lanka's GDP from approximately USD 85 billion to around USD 350 billion, said Wickremesinghe.

"Are we always going to stay poor? Are our policies to stay poor? Shouldn't we have policies which will make us rich? Not us, the future generation rich. In two decades, we won't be there, they will be there. We have to make them rich," said the President in his statement.

Wickremesinghe urged policymakers and political parties to adopt high-growth strategies and compete to achieve these goals.