Macroeconomic Performance

Abstract

Sri Lanka's emerging macroeconomic environment post-2016 holds both plusesandminuses. On the plus side, the most critical improvement is to be seen in fiscal management. Under the IMF programme with its attendant focus on revenue mobilization Sri Lanka's past record of a progressive decline in revenue collection has been reversed through a more streamlined tax revenue collection process in 2016. Largely as a result, the broader fiscal consolidation process is on track with a significant shrinking of the deficit financing gap. Additionally, fiscal consolidation efforts have also been supported by a more prudent monetary policy framework and exchange rate management policy. Overall, therefore, the signals of a much improved macroeconomic environment and policy stability on key fiscal and monetary policy fronts will offer investors considerable comfort in firming up medium t erm investment decisions.