President calls for economic sovereignty in maiden budget

President Anura Kumara Disanayake called for economic sovereignty in his maiden budget speech, despite the agreement Sri Lanka had reached with the International Monetary Fund (IMF).

He noted that from mid-2022, Sri Lanka implemented economic reforms with the support of the IMF and other international partners in order to address the crisis.

“These remedial measures in some cases added to the pressures on the citizenry ? particularly measures such as cost-reflective energy pricing, tax increases, and interest rate hikes. While we recognize the role played by the IMF Extended Fund Facility Programme (IMF-EFF) in stabilizing the economy, we are also of the view that in order to design our economic agenda, achieving economic sovereignty is necessary,” the President said.

In his Budget 2025 speech, the President said that the country went through its deepest and most complex socio, economic and political crisis in 2022 since independence and although the crisis erupted in the year 2022, the underlying causes of the crisis are historical and structural.

“Corrupt governance, failed economic policies and irresponsible public financial management are the root causes of this crisis. As a consequence, there was breakdown of normalcy in economic activities in the country which was experienced by all sectors and social groups from businesses to households. The crisis of 2022 was not a mere economic crisis, it was a colossal failure in political administration up until that point.? Even though the initial breakdown of the economy has been treated and largely contained, the economic crisis of 2022 has transformed into a humanitarian crisis affecting the poorest and the most vulnerable sections of society,” he said.

The President said that the 2025 Budget becomes historic as it lays the foundation for fulfilling the aspirations of the people for economic transformation of the country, by driving the economy towards sustainable growth and development.

He also said that economic growth must take place in a manner that is inclusive, where all citizens have enhanced economic opportunities, and the resultant benefits are reaped fairly by all strata of society.

“We have allocated funds for the senior citizens? interest subsidy from July 2025, to the maximum extent that is feasible given the tight fiscal constraints. We are also committed to implementing a robust mechanism to prevent abuse of this scheme. We have allocated 4 percent of GDP for capital expenditure in this year?s budget. This is a key contribution from the Government towards driving economic growth. We will take measures to invigorate the SME sector, public transport, rural development, agricultural rejuvenation, local entrepreneurship, incentivise research, and remove barriers to growth and efficiency of domestic and export-oriented production. In all of these and other public expenditures, we will exercise a far greater degree of caution in terms of prioritisation, targeting, effective implementation and ensuring value for money. Therefore, the economic and social return is expected to be higher from every rupee that is spent out of the public finance,” the President added.

The President said that Sri Lanka, as a country, must be patient, and collectively work with discipline and determination, and the rewards will materialise as the country goes forward. (Colombo Gazette)