Keynote Speaker Central Bank Governor Nivard Cabraal at the Daily FT-Colombo University MBA Alumni Association Post-Budget Forum yesterday in Colombo – Pix by Upul Abayasekara and Ruwan Walpola

• Says bold steps will ensure business as usual within 9 months
• Optimistic of stronger implementation of policies to assist Govt. to foster growth
• Assures to work diligently to increase GDP to $ 90 b from current $ 79 b
• Opines low-interest rate regime boosted private sector profits
• Insists only few taxes shifted, justifies it was necessary to give back to society for a stronger platform for the future

By Charumini de Silva

The Central Bank Governor Ajith Nivard Cabraal yesterday expressed confidence in Budget 2022 ushering growth with stability in 2022 aided by stronger policy implementation.

Speaking at the first physical Post-Budget Forum jointly organised by the Daily FT and the University of Colombo MBA Alumni Association with the strategic partnership of the Standard Chartered Bank, Cabraal acknowledged that bold steps have been taken to steer the stability once again.

However, he pointed out that the economy was saddled with many challenges over the past two years due to certain weak macroeconomic fundamentals, and therefore, it was imperative to take stock of the situation to implement the tough decisions.

“Budget 2022 is challenging because it was being prepared at a difficult time. We must also recognise the many bold steps taken to ensure clarity is maintained with no new burdens other than a few key ones imposed amidst the multiple challenges Government grapples with in the post-pandemic economic scenario,” Cabraal said.

He was optimistic of stronger implementation of the policies which would assist the Government to foster growth in 2022.

“The element of difficulty in implementation of the policies put people away from it. These bold steps could be around for six or eight months, but we have every intention to ensure business returns to usual within the next nine months,” he said, adding that the Central Bank has already outlined the six-month stability and growth plan.

The Governor assured to work diligently to increase the Gross Domestic Product (GDP) of Sri Lanka to be $ 90 billion from the current $ 79 billion. 

“I know it is a tall order, but these changes can be pursued diligently through the Budget 2022 and the Central Bank Road Map. We need the support of all the people, private sector and investors to steer growth,” he said.

Although some new taxes can be a temporary irritant, the Governor pointed out that almost every big company has made higher profits than the previous year due to the low-interest-rate regime continuing from 2020 to first half of 2021.

“I know it is tough for those whom that burden (taxes) has shifted. It is not the best sometimes as the private sector could perhaps be uncomfortable with these changes. But analysing the profits made by the large companies, it was evident that Rs. 330 billion has been saved by the private sector while Rs. 313 billion was saved by the Government sector by low-interest cost. Sometime, a portion of this needs to be given back to the society by form of taxes to ensure the platform is made stronger,” he said.

The Forum featured an eminent panel of private sector leaders representing international companies. They were Standard Chartered Bank – Sri Lanka Executive Director and Head of Financial Institutions Lakshan Goonathilake, CEAT Kelani Holdings Managing Director Ravi Dadlani, A. Baur & Co. Ltd. Managing Director/CEO Rolf Blaser, Airtel – Sri Lanka Managing Director and CEO Ashish Chandra, SPAR Sri Lanka CEO Martin Schoeman, GSK Pharmaceuticals Country Head Sundar Ramachandran. Technical partner PwC’s Director Tax Services Charmaine Tillekeratne and Capital Markets Partner/SC Securities CEO Roshantha Fernando also figured in the panel. Creative partner of the Post-Budget Forum was Ogilvy Digital. Full report on the Post-Budget Forum will be published in FT shortly.

 

Budget 2022 will usher tangible relief to people soon: Cabraal