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‘Fiscal reforms do not have to wait for IMF programme’

22 Jul 2022

  • Dr. Roshan Perera says macro stabilisation a ‘far-off dream’ without fiscal policies
  • Says interim Budget should be passed immediately 
    By Imesh Ranasinghe  Sri Lanka does not need to wait for a programme by the International Monetary Fund (IMF) to implement essential fiscal reforms, said former Central Bank Director Dr. Roshan Perera. Speaking to CNBC on Wednesday (20), she said that unless Sri Lanka puts the appropriate fiscal policies in place, achieving macro stabilisation will be a “far-off dream”, as monetary policy has done its part through the increase of interest rates. She noted that fiscal policy has to kick in at this point to reign in demand, which is necessary to achieve macroeconomic stability, but she added that for fiscal policies to be implemented, a Government needs to be in place. “I think all legislators and policymakers need to understand that and come together,” she said. Perera said the establishment of a Government is now critical, because it will be able to immediately present an interim Budget and have it passed in Parliament, thereby implementing the required fiscal policies immediately. Moreover, she said that Sri Lanka will have to tighten its belt and the burden of the cost of an adjustment programme, which needs to be borne by those who can afford to bear the increases in taxes, while cushioning those who have fallen below the poverty line.


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