With Sri Lanka achieving much-needed stability, Citi’s Global Head of Emerging Market Economics, Johanna Chua last week stressed the importance of focusing on growth-enhancing reforms if the country were to overcome ongoing challenges. She said such a course is essential to boost private sector investment. Growth enhancing reforms also includes further opening up of Sri Lanka and its markets, she added.
“Stability was essential even though it came at a cost. Then there is also an issue of whether people feel it (stability). For this, and given the traditional weaknesses in the economy, the country needs to generate growth,” she added.
“There is a re-rating story in Sri Lanka. There is a lot of opportunity provided Sri Lanka continues on the reforms path as well as growth. Sri Lanka cannot afford to remain as a setback nation.
The best balance is to build stabilisation with growth enhancing reforms so that you can continue both, she said. Chua was in Sri Lanka along with a group of Citi’s clients cum investors from Europe, Middle East and Asia whom she said are upbeat too. Some of the investors include holders of Sri Lanka’s International Sovereign Bonds (ISBs) who according to Chua were also exploring opportunities in local Government bonds.
“Investors are seeing a lot of growth opportunities in Sri Lanka. There’s so much potential. If the economy can grow fast, especially on a sustainable basis, then there will be an inflow of investments and funds,” Citi�.
