PM lectures Cabinet on gravity of economic crisis at inaugural meeting

• Premier Ranil Wickremesinghe highlights SL has two interconnected issues – fiscal and foreign exchange crises 
• Claims revenue shortfalls led to economic crisis 
• Reminds multi-party Cabinet of Ministers to leave politics aside and take collective responsibility to overcome crises
• Cabinet Spokesman Bandula Gunawardena assures Govt. is not aligned to any political party or person

Prime Minister Ranil Wickremesinghe

Cabinet Spokesperson Minister Bandula Gunawarden

Prime Minister Ranil Wickremesinghe has given a realistic appraisal of the state of the economy at the inaugural multi-party and non-partisan Cabinet meeting held on Monday.

“The Prime Minister gave an outlook on the state of the economy and cited it as the worst economic crisis post-Independence,” Cabinet Spokesman and Mass Media Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing yesterday.

Last Wednesday, the Cabinet was expanded to 19 with the appointment of eight more ministers by President Rajapaksa, but still no one is appointed to the crucial portfolio of the Finance Minister.

Gunawardena said the Prime Minister pointed out that Sri Lanka was dealing with two major crises – fiscal and foreign exchange, where both are interconnected.

Minister Gunawardena also highlighted that the Premier stated that Sri Lanka needs a long-term sustainable fiscal management mechanism to overcome the crisis. 

“Last year, the daily State revenue was only Rs. 4 billion, while the expenditure was Rs. 9.6 billion. Thus, creating a daily cash shortfall of Rs. 5.6 billion. To manage this fiscal gap, successive Governments obtained loans and serviced them. Eventually, this vicious cycle which spanned over decades led to the worst economic crisis,” he explained. 

He also said in 2014, the daily income of the Government was Rs. 3.2 billion, while the expenses were Rs. 4.9 billion creating a cash shortfall of Rs. 1.7 billion. In 2019, the revenue increased to Rs. 5 billion, but expenses also escalated to Rs. 9.1 billion, thus creating a daily shortfall of Rs. 4.1 billion.

“We also had an economic module where our daily lifestyles were based on imported goodies. Our annual exports were around $ 12 billion, while the import bill was $ 22 billion – resulting in a major gap in the current account,” he added.

Gunawardena also said the COVID pandemic led to higher import bills for the medicines.

“The lost revenue of around $ 10 billion from the tourism industry over the past two years, drastic drop in workers’ remittances led to faster depletion of foreign reserves – recording an overall gross domestic product (GDP) of -3.6% in 2021 or a peril,” the Minister explained.

In this backdrop, the Prime Minister called on the multi-party Cabinet of Ministers to keep aside their political differences and to collectively deliver the responsibilities in this crucial juncture, he added.

Gunawardena assured that this Government has absolutely no partisan to any political party or person. 

“The Cabinet consists of members from UNP, SJB, SLFP and SLPP,” he added. (CdeS)