Implementing export proposals critical for debt repayment by 2029: Economist

Roshan Perera Pic by Nisal Baduge

By Nuzla Rizkiya

The active implementation of export-related proposals in Sri Lanka’s 2025 budget would be critical for the government to meet the country’s debt repayment obligations in four years, a senior economist said yesterday.
Although policy frameworks such as the Public Finance Management Act (PFMA) and the Central Bank Act will help maintain macroeconomic fiscal stability, the risk of debt sustainability remains severe as the national debt-to-GDP ratio is projected to remain at 100 percent by 2029, according to Advocata Institute Research Fellow Roshan Perera.

While it is encouraging to see that the government making a strong commitment to remain within the parameters of the International Monetary Fund (IMF) programme, she stressed that authorities should continue focusing on economic growth in order to generate the necessary funds to fulfill debt commitments.

“The export target of US$19 billion is challenging, as it projects a growth rate from the current 11 percent to 17 percent. The budget mentions a growth of 5 percent but we need at least 6 percent growth to achieve high-income status,” Perera said.

However, she welcomed the proposal to introduce a national tariff policy, highlighting it as a policy-level acknowledgment that recognises exports heavily rely on imports.

The removal of import taxes on raw materials, along with plans to establish trade agreements and economic zones are also positive steps that will assist the country to battle its protectionist outlook, Perera said.

However, she cautioned that these initiatives must be implemented effectively to encourage foreign direct investment (FDI).

“Many of these measures have been discussed in previous budgets, but implementation remains the key to their success. We need exports to build our foreign reserves and earn exchange so that we can pay back the debt in four years,” Perera said.