Unpopular but necessary economic policies must be implemented, Central Bank Governor says

Central Bank Governor Dr Nandalal Weerasinghe has said necessary economic and fiscal policies must be implemented even when they are unpopular with the public.

Speaking at a lecture at the University of Kelaniya, Weerasinghe said the Central Bank had already taken difficult decisions to safeguard the economy and would not hesitate to take similar measures in future when required.

He said failure to implement necessary policies simply because they were unpopular could ultimately cause serious damage to the country.

Weerasinghe noted that tax increases may sometimes be required depending on the country’s economic needs, although the majority of people would naturally oppose higher taxes.

He acknowledged that such decisions could trigger public opposition and create a degree of social instability.

The Governor said it was therefore the Government’s responsibility to explain clearly to the public how tax increases or reductions would affect the economy.

Effective communication, he said, could help build public understanding and allow necessary policies to be implemented more successfully.

Weerasinghe also stressed the importance of making tax adjustments at the appropriate time, adding that governments should recognise that there would always be sections of society opposed to higher taxes.

He said Sri Lanka had been able to stabilise its economy to some extent despite the severe political and economic crisis of recent years because unpopular but necessary measures had been implemented at the right time.