The 2021 Budget will spell out the thrust for new development initiatives that will be unleashed over the next five years to achieve higher economic growth and prosperity for the country, Money, Capital Markets and State Enterprise Reforms, Minister Ajith Nivard Cabraal told Sunday Observer Business on Friday.
He said the focus areas of the next budget will be all mega development projects including highways, the 100,000-kilometre road stretch, ports and airports and water based projects. “The projects that will get off the ground next year will spur economic growth enabling the country to reach its six percent and above GDP growth in the next five years,” the State Minister said, adding that widespread economic activities will be launched in the country while managing the global pandemic. Coming down hard on Opposition party claims, Cabraal said the Opposition has no imagination and is bereft of new ideas to support the Government in its economic recovery plan.
“They are against the good work we have launched because they were unable to do what we are doing now to accelerate economic growth. The economy was stagnant during the past five years. We are confident there will be a sharp uptick in the economy come 2021,” the State Minister said.The Opposition has been accusing the government for living in cloud cuckoo land urging it to come up with concrete measures to revive the economy. Refuting such claims the minister said the Government has already created an environment assuring clarity and consistency in policy to attract foreign direct investments.
He said there will be new instruments to raise capital reducing dependency on international sovereign bonds as an instrument to raise capital.The government will go for a US$500 million loan from the China Development Bank in addition to the USD 500 million secured from the same bank this year to support the 2021 Budget.
The Appropriation Bill for the next budget has put the borrowing limit at Rs. 2,900 billion.
The State Minister said in Parliament that the economy will have a V shape recovery from the current crisis backed by sound policy initiatives by the government.
However, as per our report last week Sri Lanka will have a ‘W’ shape economic recovery following the emergence of the second wave of the global pandemic.
The World Bank in its twice- a year regional update predicts Sri Lanka’s GDP growth to be -6.7 percent this year down from 2.3 percent last year.According to economists, the present crisis will prevent people from working at their best irrespective of whether they live in a rich country or in an emerging economy.“ The Government stabilised the economy before 2015 despite the battle against terrorism in the country. We brought a USD 24 billion economy to a USD 79 billion economy in nine years,” Cabraal said.