Development Planning for Macroeconomic Stability

Thematic Area: Macro, Trade, & Economic Growth

Start Date: March 31, 2025

While Sri Lanka is re-emerging from its worst economic crisis since independence, re-igniting a development planning process can support a sustainable recovery.

The proposed national development plan should communicate the vision of the new policy agenda and continue the macroeconomic stability that has been already restored.

In this context, the role of an appropriate analytical macro econometric model is critical, as it should support the ongoing economic reform agenda, and be effective in understanding the key behavioural relations of the economy.

Hence, the main purpose of this research project is to develop a simple, yet comprehensive, macroeconomic model, using widely accepted developing country specifications for the key behavioural relationships and estimating the structural parameters as a system.

This model should also effectively link sectoral priorities to the economic context. These priorities include capacity building for the staff of the National Planning Department (NPD) and working closely with the NPD and other departments of the Ministry of Finance, Planning and Economic Development.