The ninth edition of the annual flagship Outlook Report for 2024 by the Ceylon Chamber of Commerce was launched at the Economic Outlook 2024 seminar recently.
Governor of the Central Bank of Sri Lanka, Dr. Nandalal Weerasinghe delivered the keynote address.
Compiled by the Economic Intelligence Unit (EIU) of the Ceylon Chamber, the report provides insights into crucial business planning variables such as growth, inflation, interest rates, and exchange rates.
The theme for this year’s report is “Striving towards a New Growth Path.” It comprehensively reviews the performance of the domestic, global, and regional economies, offering perspectives on key sectors such as tourism, apparel, IT/BPM, FMCG, tea, banking, and renewable energy.
Chairman of the Ceylon Chamber, Duminda Hulangamuwa said, “The current issues can be resolved with the implementation of reforms that will benefit the common people”.
Dr. Nandalal Weerasinghe said, “There are positive signs of 3% growth. The reforms may be difficult, but they will produce results if they are well-directed. We can expect a surplus in the external sector in 2024 if we manage the fiscal balances and create spillover effects.”
Economist, Ceylon Chamber, Sanjaya Ariyawansa said that Sri Lanka’s economic growth is poised for a modest recovery in 2024. This follows a challenging period in 2023, marked by economic contraction, only to witness a positive growth of 1.6% in the third quarter. The anticipated rebound depends crucially on effective debt restructuring and the implementation of key structural reforms aimed at achieving macroeconomic stability.
The report highlighted that inflation is expected to stabilise at a mid-single-digit level in 2024, following significant disinflation in 2023. The external sector of the Sri Lankan economy exhibited marked improvement in 2023, with a notable reduction in the merchandise trade deficit and a surge in net service exports, particularly in tourism, along with a remarkable improvement in inflows of workers’ remittances.
In terms of monetary policy, the Central Bank shifted to a more accommodative stance in 2023 to support economic recovery and manage inflation. Despite facing a significant budget deficit in 2023 with rising interest expenditure, a primary budget surplus was achieved through revenue-based fiscal consolidation.
The global economy is anticipated to slow down in 2024, accompanied by potential geopolitical risks, financial challenges in weaker economies, and persistent inflation pressures. The report also highlighted the potential disruptions to domestic economic recovery, including a slowdown in exports due to global economic slowdown. Despite the proposed elections this year, Ariyawansa said the Government must continue to focus on implementing key structural reforms to support economic recovery. This includes enhancing governance, improving public sector efficiency, and fostering a conducive environment for private sector growth. Such reforms are deemed essential to avoid repeated reliance on external financial support.
Session panellists included Committee Member, SOE Restructuring Unit, Murtaza Jafferjee, CEO, Dialog Axiata Supun Weerasinghe, CEO, Vidullanka, RiyazSangani, President, Retail, John Keells Holdings Charitha Subasingheand Senior Research Fellow, Advocata Institute, Dr. RoshanPerera.
The panelists shared several viewpoints on the economic outlook for 2024, including measures that need to be taken to ensure stability and progress.
Jafferjee said, “The sooner we reform the SOEs, the sooner we reap the benefits.”
Dr. Perera said, “Structural reforms will complement the tight monetary and fiscal policies.”
