Economic Progress and Strategic Diversification
President Anura Kumara Dissanayake highlighted significant progress in Sri Lanka's economy, emphasizing that the nation has made remarkable strides following a period of economic collapse. The government has achieved record-breaking export revenue in the first half of the year, showcasing a positive shift in the country's economic trajectory.
During an adjournment debate on the current economic situation in Parliament, the President outlined the government's focus on diversifying the export market. This strategy aims to reduce dependency on a limited number of countries and instead expand into international markets with high growth potential. Currently, around 25% of Sri Lanka’s exports go to the United States, while 23% are directed towards European Union countries. Any tax increases from these regions could significantly impact the economy, making diversification crucial for stability.
The President noted a substantial increase in exports to African and Asian markets. Compared to June last year, exports to Africa have risen by 57%, and to Asia by 26%. These figures reflect the government's efforts to explore new trade routes and strengthen economic ties with emerging markets.
Negotiations with the United States
Discussions regarding tariff rates between Sri Lanka and the United States are ongoing. Although no final agreement has been reached, there has been some level of consensus. As a result of these negotiations, the tariff rate on Sri Lankan exports has been reduced to 20%, which the President described as a notable achievement. This outcome is seen as a milestone in bilateral relations, reflecting the government's commitment to protecting local industries and businesses.
The negotiation team played a pivotal role in achieving this reduction by carefully assessing the potential impact on domestic enterprises. The President emphasized the importance of maintaining favorable trade conditions to support economic growth and sustainability.
Tax Compliance and Infrastructure Development
The government is also focusing on improving tax compliance. Efforts are being made to encourage individuals and businesses that evade taxes to fulfill their obligations. A list of 200 major tax defaulters has been identified, with the total unpaid taxes amounting to approximately 100-150 billion rupees. Addressing this issue is essential for ensuring fair contributions to the national economy.
In addition to tax reforms, the government is committed to providing necessary infrastructure and facilities to industrialists. However, it is expected that these businesses will pay their taxes properly, contributing to the overall economic development of the country.
Tourism and Foreign Investment Growth
The tourism sector has shown promising growth, with revenue increasing by 10% compared to the previous year. The President expressed confidence that 2025 will be the year with the highest tourism revenue, indicating a recovery and expansion of this vital industry.
Foreign direct investment (FDI) has also experienced a significant boost, with a 101% increase compared to the previous year. In the first six months of this year, FDI reached $507 million, up from $252 million in the same period last year. The government expects to exceed a billion dollars in FDI for the year, further supporting economic growth.
Domestic investments have also increased by 18% this year, thanks to the efforts of the Board of Investment. These developments highlight the government's success in attracting both foreign and local capital.
Economic Stability and Future Prospects
The President acknowledged the sacrifices made by the government over the past year, which have led to a more stable and resilient economy. He assured that the upcoming budget will continue to deliver economic benefits to the people, reinforcing the government's commitment to long-term prosperity.
Despite some individuals who may wish for economic instability, the President firmly stated that such scenarios will not occur. He urged those with opposing views to pursue alternative political paths, emphasizing the government's determination to maintain economic progress and stability.