Sri Lanka Treasury Secretary warns of adverse weather conditions affecting economic growth

Treasury Secretary of Sri Lanka Dr. P.B. Jayasundera says the country's economy is on track, but warned of adverse weather conditions undermining growth levels. Dr. Jayasundera told the media during the release of the 2011 Annual Report of Ministry of Finance and Planning that the country's economy will expand around 7 percent while the trade deficit would be met around 6.2 percent.
He observed that while the 2011 performance of the economy is satisfactory, there was a need to put in place structural changes to bring down the trade deficit. He observed that there were challenges ahead that would require strong policies and the trade deficit was a key issue. He explained that there was a need for more credit to filter into the real economy. Dr. Jayasundera called on banks to reduce consumer loans and provide more long-term credit to agriculture, dairy and fisheries sectors. Pointing out to statistics, the Treasury Secretary observed that despite an increase in credit, the bulk of the loans were on vehicle imports and other goods that did not result in overall economic benefits. Dr. Jayasundera also called on the government to increase focus on increasing domestic savings, taxes and reduction of losses in State-Owned Enterprises (SOEs). Taking a tough stance on the loss making SOEs, he said, "Directors of loss-making SoEs should be replaced. They are the responsible trustees of public wealth and SoEs can be profitable companies. But for this, they need competent chairmen and boards of directors that can work as a team."