- CB had projected 6% economic growth for this year
The Central Bank will soon cut Sri Lanka’s growth projection for 2021, as expansive restrictions on businesses, livelihoods and many facets of daily lives with no end in sight are having a heavier toll on the economy, resulting in irreversible damage in some cases.
As the Central Bank assesses the situation post April third week, it forecasts the current restrictions and controls on wide swathes of individual and business activities to have already clouded its near-term economic projections.
The Central Bank had projected the economy to grow by 6.0 percent in 2021, coming off from a contraction in 2020, due to virus-related restrictions that year, which reduced people’s incomes and thereby made them poorer than a year ago.
“Essentially we are expecting a lower growth than what was projected in the annual report,” said Central Bank Director Economic Research Dr. Chandranath Amarasekara.
Adding that it was too early to assess the situation, which is still developing, he said, “but we will do that very soon once lockdowns are removed, hopefully sooner rather than later”.
Sri Lanka miserably failed to strike a balance between virus control and maintaining a working economy, due to myopic and one-sided decisions of a few who are tasked with controlling COVID-19.
They gained more prominence lately in influencing key decision makers in the government into believing that the only option available to contain the virus was to lockdown the country, for which nearly a half-dozen vaccines are now available compared to when it first broke out a year ago.
Apart from the economic toll, for two years running, Sri Lanka’s school-going-age children are forced to stay home, due to the failure of the country’s policymakers and bureaucrats to develop a mechanism to safely return them to schools, taking a massive toll on their personality development, as these children miss peer association, physical activity and a key trait of appreciating diversity among people.
Meanwhile, repeated economic contractions or prolonged spells of slow economic growth delay the economic well-being of the people, which then spills over into mass unrest in social and political spheres, derailing even the very slim chances for poor countries like Sri Lanka have to broaden people’s true economic and individual freedoms.