RW calls for credible COVID-19 economic package from Govt.

Monday, 18 May 2020 00:00 - - {{hitsCtrl.values.hits}}

Says package should be based on transparent economic assessment
Warns SL could slip into recession due to COVID-19, appeals for assistance to SMEs and other critical industries
Says when most countries have allocated as much as 10% of GDP to provide stimulus, Govt. has only managed 2% of GDP
Criticises money printing, warns it could lead to inflationary pressure
Concerned future job losses could increase by as much as 500,000

United National Party (UNP) Ranil Wickremesinghe yesterday called on the Government to present a credible economic package on how it will revive Sri Lanka’s COVID-19-hit economy and sustain critical industries.

UNP leader

Ranil Wickremesinghe

Wickremesinghe, releasing a statement, pointed out that numerous multilateral organisations have already estimated that the economic impact of the virus will be a global recession. Given this possibility, he stressed that since the global economy could see a negative growth of -3% of GDP, similarly Sri Lanka may also experience a negative GDP growth in the coming months.

“The Government should work with the IMF and address these issues while providing the country with an economic assessment of the current situation. Jobs and livelihoods are at stake, therefore it is important the Government present to the country a credible economic package,” the statement said.

Wickremesinghe also stressed that key industries, such as apparel exports, tourism, and foreign remittances, will all be impacted due to the lockdown and subsequent global recession.

Commenting on the Government’s recent tax structure adjustments, Wickremesinghe stressed that government revenue would also see a reduction. He urged the Government to reconsider the decision to impose a blanket ban on imports, stating that the domestic market would need to continue to operate in order for government revenue to increase once again.

The UNP Leader predicted that with the uncertain financial future, as many as 500,000 people could be facing layoffs. This increase in unemployment will affect all sections of society, from three-wheeler drivers to executives.

Declaring that the Government response to the current financial crisis is inadequate, he also criticised the decision to print Rs. 200 billion during this period as it would only lead to inflationary pressures.

Commenting on the stimulus package presented by the Government, Wickremesinghe drew their attention to the fact that the Rs. 50 billion moratorium as well as other measures by the Government only accounted for about 2% of the GDP, while other countries have gone as far as allocating 10% of their GDP for financial assistance.

The UNP Leader also stressed on the need for small and medium enterprises (SMEs) to be given relief by the Government to safeguard jobs.