Inflation Stabilizes, But Sri Lankan Wages Lag Behind

COLOMBO (News 1st); Despite positive macroeconomic indicators, the lives and livelihoods of people in Sri Lanka have not fully normalized.

While inflation has stabilized, wages have yet to catch up with the rapid increase in prices experienced during the worst of the crisis.

In his recent comments, the Finance Secretary emphasized the need for economic growth to drive income growth. The more stable macroeconomic conditions provide a foundation for recovery, as evidenced by the 4.5% GDP growth recorded in the fourth quarter of 2023.

However, the Finance Secretary stressed the importance of qualitative improvements in economic growth. Rather than relying solely on debt-driven inflows, Sri Lanka should focus on exports of goods (including agricultural products), services, and foreign direct investment.

Sustainable economic growth requires continuous enhancements in productivity, which directly impact real wages, he noted.

Climate resilience is another critical aspect. Sri Lanka, being among the countries most vulnerable to climate change, must adapt its economic activities to address challenges arising from volatile rainfall, ocean temperatures, and other climate-related shocks, stressed the Finance Secretary.