Inflation to ease after 3 months: Finance adviser

Consumer price pressures would fall to tolerable limits after three months and reach 6-7% by June as the government is aggressively importing daily necessities to keep their domestic supplies stable, Finance Adviser Dr Salehuddin Ahmed told reporters Tuesday.

The interim government would not allow shortages in essential products from now and is importing rice, lentils, fertiliser, liquefied natural gas (LNG) and other products to ease the present crisis. The imports would start having trickle-down effect after March.

Controlling the supply and distribution of goods is the main challenge for the interim government at present, he said while speaking at the Secretariat.

To further ease price pressures, the government would review tax regimes during budget revisions in March. However, for now some VAT hikes, like the ones imposed on fruits, are necessary, and cannot be withdrawn in spite of protests by stakeholders, he said.

The finance adviser also highlighted that the state of economy last year was even worse than Sri Lanka’s in 2019. At present, only 12 out of 60 commercial banks are functioning smoothly, while the rest are limping.

The government is striving hard to improve the economic situation, and has achieved notable successes since assuming office in August last year.