IPS 2025 shows AKD how technology should be used for change and driving digital economy

PRESIDENT Anura Kumara Disanayake or AKD Government has virtually stabilised the nominal or money side of the economy, thanks to his pursuance of the IMF prescribed policy package under its Extended Fund Facility or EFF implemented by Sri Lanka's Government since March 2023.

- By W.A. Wijewardena

Digital economy

I say virtually because there are still risks of the nominal parameters in the economy - inflation rate, exchange rate, budget numbers, balance of payments, and external debt repayment capabilities - getting reversed if the real economy involving in the production of the real goods and services does not perform as expected.

Though the real economic growth has rebounded from its negative or near zero level a few years back to positive range recently, the attained growth of close to 5% in 2024 and 2025, is not different from the historical average growth of the country since independence. This is the growth which Sri Lanka would attain under normal circumstances even if the country would not do anything about it. Hence, in my view, as I had argued in a previous article in this series, this magic 5% growth is either zero or close to zero growth rate.

For Sri Lanka to attain a notable economic growth for improving the welfare of the people and joining the rich country club within the next 25 years or so, it needs to grow at least by about 9%, year after year, over this period. Hence, without being complacent about the current growth rate, the country should have a different strategy to push the real economy up to a high growth rate and sustain it over the next growth cycle.

IPS report on the state of the economy