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Economist: Govt. has not reduced expenditure sufficiently

Published

3 years ago

2023/12/29

by Rathindra Kuruwita

The implementation of the IMF recommendations had left the Sri Lankan public resentful, says Premachandra Athukorala, Professor of Economics at the Australian National University.

The government has not reduced its expenditure, and it has failed to spell out what it intends to do, he said. “The IMF itself says this in its latest report. The IMF says there is reform fatigue in the country,” he said.

Prof. Athukorala has said Sri Lanka’s loan instalments that had gone into arrears during the last two years ran into about three billion dollars.

“The longer we take in external debt restructuring, the higher will be the arrears. Sri Lanka’s credit rating has been downgraded and private banks face great difficulties issuing letters of credit because of this,” Prof. Athukorale said, noting that there would be a surplus of about a billion dollars in Sri Lanka’s balance of payments in 2023. However, the country’s foreign reserves are at a historical low.

“The country faces instability. When this happens, money flows out of the country through informal means. In the balance of payments, there is a component called errors and omissions. These keep on rising. This is because money is sent out when the Central Bank relaxes restrictions on moving capital around and through over-invoicing and under-invoicing,” he said.

Prof. Athukorala said that Sri Lanka hoped to get a 30-percent haircut from its creditors. However, so far, they had only agreed to a 20-percent haircut, but the government is not agreeable to that, he said.

“The government’s expenditure is about 200 percent of its income, and 85 percent of it is recurrent expenditure. This year, we reduced the primary deficit by lowering capital expenditure. The IMF does not ask us to cut expenditure directly because it is politically sensitive. However, we need to rationalise our recurrent expenditures as well as increase tax revenue. Most people don’t like taxes because they think the government is wasting money. We need to change this,” he said. (RK)

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Related Topics:economist IMF remachandra Athukorala ustralian National University

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Sun directly overhead Anamaduwa, Moragollagama, Dambulla, Manampitiya and Valaichchenai, at about 12.10 noon today (02)

Published

53 seconds ago

2026/09/2

Priyan

The sun is going to be directly over the latitudes of Sri Lanka from 28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is overhead today (02) are Anamaduwa, Moragollagama, Dambulla, Manampitiya and Valaichchenai, at about 12.10 noon.

News

SC rejects petitioners’ request for full bench

Published

58 mins ago

2026/09/2

Sahan Weerasooriya

The Supreme Court yesterday rejected a request that the petitions challenging the 22nd Amendment to the Constitution be heard by a full bench of the Supreme Court.

Rejecting the request, Chief Justice Preethi Padman Surasena said the consideration of the petitions would proceed before the five-judge bench.

Appearing on behalf of one of the petitioners, President’s Counsel M. A. Sumanthiran made the request when the petitions were called for hearing yesterday before a five-judge bench of the Supreme Court, headed by Chief Justice Surasena.

President’s Counsel Saliya Pieris, Ali Sabry, Geoffrey Alagaratnam, Eraj de Silva, Srinath Perera, Anura Meddegoda, and Maithri Gunaratne, along with other counsel appearing for several other petitioners, also made the same request.

Solicitor General Viraj Dayaratne, appearing on behalf of the Attorney General, pointed out that the authority to determine the composition of a judicial bench rested with the Chief Justice. Refering to Article 132(3) of the Constitution, the Solicitor General argued that the discretion to determine the number of judges on a bench lay with the Chief Justice and that no other party had the authority to interfere in the matter.

Counsel including President’s Counsel Nigel Hatch, appearing for an intervening petitioner, also made submissions pointing out that the discretion to determine the composition of a bench rested with the Chief Justice.

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Seven years RI for former Civil Aviation Minister Piyankara Jayaratne

Published

1 hour ago

2026/09/2

Sahan Weerasooriya

Piyankara Jayaratne at the Colombo High Court yesterday. Pic by Nishan S. Priyantha

The Colombo High Court yesterday sentenced former Civil Aviation Minister Piyankara Jayaratne to seven years’ rigorous imprisonment after finding him guilty of a corruption charge involving a Rs. 320,000 payment made by state-owned SriLankan Catering Ltd.

Colombo High Court Judge Mohamed Mihail delivered the verdict following a lengthy trial into the transaction, which dates back to the 2014 May Day rally of the United People’s Freedom Alliance (UPFA).

The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) had indicted Jayaratne, alleging that he abused his position as Civil Aviation Minister by influencing an executive officer of SriLankan Catering to release the funds.

According to the indictment, the money was paid from SriLankan Catering’s accounts to a private catering service in Marawila to provide lunch for Jayaratne’s political supporters who attended the May Day rally.

CIABOC has alleged that the payment caused a loss to the state and constituted an offence of corruption.

Jayaratne was serving as Civil Aviation Minister at the time.