- Undermining hard-earned achievements would be devastating
- Present IMF program should be the last
Sri Lanka has achieved a number of positive outcomes which have begun to yield results due to prudential macroeconomic policies, fiscal discipline and debt management under the IMF program, said Secretary to the Treasury and the Ministry of Finance, Mahinda Siriwardana.
“Some of the key outcomes include efficient public finance management and increasing Government revenue from around 8.5 percent of the GDP, one of the lowest in the world to 13.5 percent last year and our aim is to increase it to 15 percent this year,” Siriwardana said.
He was delivering the keynote speech at the launch of the Master of Public Finance Management (MPFM) Degree program 2025/26 by CA Sri Lanka and the Association of Public Finance Accountants of Sri Lanka (APFASL) on Friday.
He said Sri Lanka is at a decisive but determined phase of economic recovery after facing the most severe and complex economic crisis in the post Independence history.
Our path-forward defensive strategy is macroeconomic stability, debt sustainability, efficient fiscal management and accountability which are not mere abstract walls but the pillars of the economy.
“Our history has been reverting to erroneous macro-economic policies that forced the country to seek 17 IMF programs since Independence repeatedly relying on stimulus and monetary support to boost economic growth and create jobs instead of doing the hard and painful economic reforms which are the true drivers of economic growth,” the Treasury and Finance Ministry Secretary said.
Citing past policy errors, he said the major policy mistake that was committed was the tax policy error in 2019 along with artificial management of the exchange rate and fiscal indiscipline leading to a severe economic crisis which was a man-made crisis.
Siriwardana said that all the erroneous policies that led to the economic crisis could have been avoided had the authorities listened to him when he repeatedly warned about the impending crisis as Deputy Governor of the Central Bank but no one paid heed to him which led to an unprecedented economic crisis due to the failure to build fiscal buffers and now we are painfully rebuilding the buffers.
“We had fiscal rules in the past which were not observed leading to fiscal mismanagement. I must happily place before you that the Treasury has not taken a single cent from the Central Bank for budgetary financing since September last year. The Public Debt Management and under it a Public Debt Management office was set up to ensure public debt of the country is managed in a responsible manner,” Siriwardana said.
However, he said that there is no time to waste, make irresponsible policy decisions and be complacent as the situation is still delicate with obligations to creditors to be fulfilled.
“Deviating from the reform path would not only undermine hard-earned credibility but also would have devastating effects on the economy,” Siriwardana said, while urging that the country should make this the last IMF program.
