Senior Lecturer of the Department of Economics at the University of Colombo Dr. Indrajith Aponsu predicts an economic downturn if the proposals of the International Monetary Fund are implemented as recommended.
Speaking to NewsRadio, Dr. Indrajith Aponsu claimed that an economic climate similar to that of during the period between 2015 and 2019 will be created if the IMF policies are implemented.
Dr. Aponsu is of the view that the main crisis escalated during the time period even though the country was able to obtain many foreign loans.
Speaking to NewsRadio, Dr. Indrajith Aponsu said the government must reach a decision whether it will create a path to succeed by obtaining loans or by generating a better income.
He said the most common recommendation of the International Monetary Fund is increasing state income while reducing state spending.
He said state income can be increased through imposing indirect taxes adding however the public will face further burdens due to such taxes being imposed.
Dr. Aponsu said public investments and social welfare programs must be cut down in order to reduce state expenditure adding however there are concerns how the livelihoods of the public can be assured through reducing social welfare expenses.
He said the IMF will be useful in formulating a process to pay off existing debt and create opportunities to obtain new loans.
Dr. Indrajith Aponsu said the country is facing a dire foreign exchange crisis that needs to be solved.
Dr. Aponsu believes the government needs to focus more on taking necessary action pertaining to the export-import disparities instead of focusing on the income-expenditure disparities.