Cabraal: Govt. will deal with evolving scenario if EU decides to withdraw GSP Plus facility

By Sanath Nanayakkare

Central Bank Governor Ajith Nivard Cabraal yesterday said that discussions were underway on how to cushion the impact on Sri Lanka’s export earnings in case the European Union (EU) withdrew the Generalized System Preferences Plus (GSP+) facility given to Sri Lanka.

“We have already considered some policy measures with all stakeholders to deal with such a scenario, and therefore we won’t be hesitant to deal with a potential reversal of the EU GSP Plus facility,” he told reporters at a news conference held at the Central Bank.

The Foreign Ministry said on 113 Oct. that Foreign Minister G L Peiris, briefing the Colombo-based diplomatic community, sought assistance for post-pandemic economic activity and ongoing domestic processes addressing past human rights violations.

Minister Peiris also emphasised the importance of the EU GSP+ trade concession worth over US $ 500 million.

The Foreign Minister said that the continuation of GSP plus was vital for the Sri Lankan economy, not only for its apparel sector but also for other areas of bilateral trade.

Speaking on the status of the economy, the Central Bank Governor said:

“At present, Sri Lanka is experiencing the consequences of price increases in the global commodity market including fuel, LP gas and food staples. This is a result of the rebounding global economic activity amid accelerated growth in those countries emerging out of the pandemic. However, we hope we can control inflation at mid- single digits and regain a notable growth rate in 2022 with the right policy measures in place.” he said.

Meanwhile, Minister Gamini Lokuge addressing the media on the cost of living said yesterday:”When prices increase in the global market and the dollar appreciates against the Sri Lanka rupee, the government is not in a position to provide essential goods at subsidised prices. For example, the Ceylon Petroleum Corporation (CPC) won’t be able to absorb the losses due to the sale of fuel to the public at subsidised rates anymore.”