Dr. Dushni Weerakoon comments on Budget 2021

26 November 2020

Dr. Dushni Weerakoon was a panelist at the HSBC Webinar on ‘Economic Outlook for Sri Lanka and Building Competitive Advantage’ on 26 November 2020. She noted that the Budget 2021 has been arrived at under an exceptional level of uncertainty and it is unrealistic to assume that fiscal policy will revert to its pre-crisis setting any time soon.

Dr. Weerakoon explained that with the focus right now on getting through the health crisis, the chances of any serious spending cuts are remote. Similarly, business and investor sentiments need to rebound before addressing revenue gaps. In the interim, government debt will be on a rising trajectory. Within these constraints, policy should focus on boosting growth and reducing the burden of debt that way. The Budget 2021 aims to do so, but a more detailed plan to bring fiscal deficits and debt under control needs to be worked through, to keep financial markets and investors on board, she said.