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Economist: Govt. has not reduced expenditure sufficiently

Published

2 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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Deep Depression likely to cross the Sri Lankan coast between Trincomalee and Jaffna during the morning today (10 January 2026)

Published

2 mins ago

2026/01/10

Priyan

Warning for deep depression to the East of Sri Lanka.
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 01.30 a.m. on 10 January 2026 for the period until 01.30 a.m. on 11 January 2026

The deep depression over the southwest Bay of Bengal was located about 50 km North-northeast of Trincomalee at 01:00 a.m. on 10 January 2026. It is very likely to move northwestwards and cross the Sri Lankan coast between Trincomalee and Jaffna during the morning today (10 January 2026).

Latest News

Landslide RED warnings issued to the Divisional Secretaries Divisions of Ududumbara, Nildadndahinna and Walapane

Published

17 hours ago

2026/01/9

Priyan

The landslide early warning center of the National Building Research Organisation [NBRO] has issued RED warnings to the districts of Kandy and Nuwara Eliya for the next 24 hours effective from 0900 hrs today [09th January].

Accordingly,
LEVEL III RED landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Ududumbara in the Kandy district, and Nildandahinna and Walapane in the Nuwara Eliya district.

LEVEL II AMBER landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Wilgamuwa in the Matale district, and Mathurata and Hanguranketha in the Nuwara Eliya district.

LEVEL I YELLOW landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Uva Paranagama, Welimada, Kandaketiya, Badulla, Meegahakiwula, Hali_Ela, Passara and Lunugala in the Badulla district, Minipe in the Kandy district, Ambanganga Korale, Ukuwela, Rattota, Naula and Laggala_Pallegama in the Matale district, and Nuwara Eliya in the Nuwara Eliya district.

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A Policy is being formulated to ensure Child Protection in the use of Technology — Prime Minister

Published

20 hours ago

2026/01/9

Priyan

Prime Minister Dr. Harini Amarasuriya stated that a policy is currently being formulated to ensure child protection in the use of technology.

The Prime Minister made this statement on Thursday (08) in Kandy while briefing the Most Venerable Mahanayake Theros of the Asgiriya and Malwathu Chapters on the issue that has arisen regarding the Grade 6 English module. Thereafter, printed copies of all modules were presented to the Mahanayake Theros.

Earlier on Thursday (08), the Prime Minister visited the Malwathu Viharaya in Kandy and met the Most Venerable Thibbatuwawe Sri Siddhartha Sumangala Nayaka Thero, the Mahanayake of the Malwathu Chapter, where she explained the error that had occurred in the first print run of the English module for Grade 6 .

The Mahanayake Theros emphasized that education is a sensitive subject and that such matters should be handled with greater sensitivity and proper oversight. They further advised that a formal investigation should be conducted and that education reforms should be carried forward in a systematic manner.

Subsequently, the Prime Minister visited the Asgiriya Maha Viharaya and met the Most Venerable Warakagoda Sri Gnanarathana Mahanayaka Thero of the Asgiriya Chapter, where she clarified the error related to the English module.

The Mahanayake Thero noted that education reforms are a timely necessity and should be implemented with due oversight and careful review and also pointed out that there are broader issues in Sri Lanka regarding the use of technology, which are evident in the manner in which modern tools such as AI technologies are being used on social media.

Clarifying the issue Prime Minister Dr. Harini Amarasuriya further stated,

“We have appointed a committee to look into this issue, and based on the recommendations of the National Institute of Education (NIE), steps were taken to remove the relevant lesson. In addition, all printed copies of the relevant module have been stamped, and no module has been distributed to schoolchildren. A formal investigation into this matter has been initiated by the Ministry, and a complaint has also been lodged with the Criminal Investigation Department.

At the same time, we are in the process of formulating a policy on child protection in the use of technology”.

Thereafter, addressing the media and responding to the’ questions raised by journalists, the Prime Minister stated:

“The Opposition is attempting to use this national task for their own political advantage. However, many in society have expressed their views on the issues that have arisen in a positive manner, with the objective of identifying and correcting mistakes. The government has decided to move forward with education reforms by recognizing the error that have occurred and rectifying them. We will take the no-confidence motion brought by the Opposition as an opportunity to further advance dialogue on education reforms”

The occasion was graced by the Most Venerable Anunayaka Thero of the Asgiriya Chapter, Venerable Narampanawe Ananda Nayaka Thero; Deputy Registrar of the Asgiriya Chapter, Venerable Muruddeniye Dhammarakkhita Thero; Deputy Registrar of the Malwathu Chapter, Venerable Mahawela Rathanapala Thero; Members of Parliament Thushari Jayasinghe and Thanura Dissanayake; Mayor of Kandy Chandrasiri Wijenayake; Secretary to the Ministry of Education Nalaka Kaluwewa; and Secretary to the Ceylon Teachers’ Union in Central Province D. D. Wimalaweera.