‘Politicians and public must behave better’

by Rathindra Kuruwita 

Sri Lanka has done extremely well on the economic front during the last 18 months, says former Governor of the Central Bank of Sri Lanka (CBSL) Dr. Indrajit Coomaraswamy.

Dr. Coomaraswamy revealed his assessment of the country’s economic recovery process while addressing a Centre of Poverty Analysis (CEPA) symposium recently held under the theme, ‘Retrospect and Prospects on Poverty Alleviation in an Era of Economic Crisis’ in Colombo.

In terms of macroeconomic indicators, Sri Lanka had salvaged the economy from a GDP growth of minus 10 percent the previous year to a slight economic growth in the third quarter of 2023, he said.

“The CBSL strongly believes that there will be a positive growth in the fourth quarter of 2023. But don’t forget that the economy shrank by 10 percent last year. So, it will take us about three years to reach where we were in 2021,” he said.

The inflation rate, which was 70 percent in September 2022, had come down to 1.5 percent, Coomaraswamy said, paying a glowing tribute to the incumbent CBSL Governor Dr. Nandalal Weerasinghe.

“Present Central Bank Governor Dr. Nandalal Weerasinghe was a Deputy Governor when I headed the CBSL. I relied heavily on his Central Banking skills. He is an extremely knowledgeable Central Banker. He will do what is necessary. He did the right thing. He hit the inflation very hard upfront. He has brought inflation down to 1.5 percent. Nobody expected this level of stabilisation when it came to inflation. Even the IMF didn’t,” Dr. Coomaraswamy said.

Coomaraswamy, however, warned Sri Lanka that a lot more has to be done.

“Sri Lanka usually starts IMF programmes well. We take the medicine, and we stabilise the economy up to a point. By the time we have a decent foundation, an election approaches and the discipline goes.”

Coomaraswamy, however, insisted that he was not calling for the postponement of elections.

“I am not saying that. No way will I advocate for a breach of the Constitution. All I am saying is that we need to behave better. Our politicians need to behave better. We, as a people, need to behave better,” he said.