GDP growth in 2025, a stimulator for 7% growth target

The country can achieve a seven percent GDP growth in the mid to long term because it recorded a positive growth rate of close to 5% in 2025, said Deputy Minister of Finance and Planning and Deputy Minister of Economic Development, Dr. Anil Jayantha Fernando.

He said the economy grew at that rate last year despite many headwinds blowing from the previous year in the domestic economy and globally geo-political tension and high trade tariffs imposed by the US.

The country notched a positive economic growth rate last year recovering from a sluggish rate in the previous year with GDP expanding by around 4.8%-5.4% in the first half, driven by services and industry sectors. However, the Deputy Minister said to reach its dream of being «A rich country with a beautiful Life” it has to achieve a much higher GDP growth rate going beyond the current 5%.

“For that, attracting large scale foreign direct investments is crucial,” the Deputy Minster stressed while outlining plans to do it this year. The Government aims at creating a favourable tax policy for foreign investors, improve the ease of doing business index by streamlining approval processes for projects and getting the one-stop shop concept going soon to woo investors to the country.

Be as it may, analysts have said that Sri Lanka cannot compete with the rest of the regional peers in attracting investors as it has a very unhealthy tax policy that drives away investors to park their money in countries that offer a better return and a conducive climate for doing business. The BOI, the key body responsible for driving FDIs to the country has only managed to edge just above the US$ 1 billion FDI target in 2025 recording close to US$ 1.1 billion for the year compared to around US$ 700 million notched last year. The present framework of the Government aims at a sustainable economic growth, targeting a GDP of $120 billion by 2030 through a manufacturing-based economy. The policy is structured into four sections focusing on various aspects of national development. All government entities are mandated to align their plans with its goals.

According to economic think tanks and policy analysts the country’s marginal recovery in Foreign Direct Investment inflows in 2025 masks deeper institutional and policy failures that continue to undermine the country’s ability to compete for global capital.

However, according to the Deputy Minister of Economic Development the country is poised to get to where it should be economically.

“We will get to where we need to be as a country economically step by step backed by prudent macroeconomic policies,” Deputy Minister Dr. Fernando said.

Source: Sunday observer