Presidential poll result points to policy uncertainty, says S&P
Monday, 12 January 2015 01:17
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The outcome of Sri Lanka’s presidential election - Maithripala Sirisena defeating Mahinda Rajapaksa -presents some policy uncertainty, credit rating agency Standard & Poor said.
“This uncertainty stemmed both from the disparate nature of the coalition that fielded him as candidate and his election promises portending significant changes,” the agency said.
“We believe the country faces a period of uncertainty following the relative stability that prevailed under Rajapaksa,” S&P said.
“Sri Lanka’s executive presidential system was highly centralised, exerting significant control over the key areas of the economy and the military. This allowed moderate progress in economic reforms and fiscal consolidation,” S&P said.
Since the coalition parties have not agreed on a common approach to economic policy and were united by the desire to unseat Rajapaksa, policy differences are likely to surface when parliamentary elections are called.
Sirisena promised to expand subsidies and raise welfare payments, which, in the absence of offsetting revenue gains, would jeopardise Lanka’s hard-won progress in reducing its large debt and interest burdens, S&P said.
