Lanka decides to expedite all China-funded projects

The Sri Lankan government has decided to expedite development projects funded by China, the ministry of national policy and economic affairs has said.The ministry said the decision was taken following talks held between a Chinese government delegation and State Minister of National Policy and Economic Affairs Niroshan Perera, reports Xinhua news agency.Zhou Liujun, head of the Department of Outward Investment and Economic Co-operation of China’s ministry of commerce, met the state minister and discussed Chinese investments in Sri Lanka.The state ministry of national policy and economic affairs said at the talks it was proposed to finalise a trade and economic pact between China and Sri Lanka.Sri Lanka is home to a large Chinese community. Chinese tourist arrivals to Sri Lanka have also seen a rise this year.ECONOMIC GROWTH: Sri Lanka is expected to see 5.3% economic growth in the next three years despite challenges, the latest Global Economic Prospects report released by the World Bank has showed.“Although facing monetary and fiscal tightening, growth of the island will (occur due to) infrastructure spending financed with sizable FDI flows... Recent restraint imports policy will also contribute to growth in this year, and both 2017 and 2018,” Xinhua news agency quoted the World Bank as saying.The report notes that in Sri Lanka expansionary fiscal policy has contributed to the increased deficit and debt levels with government debt levels above 70% of GDP. Moreover, rising core inflation and high credit growth have compelled the central bank to tighten policy.However, the report said Sri Lanka was also making efforts to prevent the deterioration in public finances, including the increase of the VAT rate from 11 to 15%.The report suggested Sri Lanka to take such measures as strengthening public financial management, broadening the tax base, reducing exemptions and improving tax administration against the backdrop of a fragile global economy.