Economy Forward

  Article's purpose and background This short article is to highlight radical actions taken by the President Donald Trump to clean up the federal government from corruption and inefficiency to reform it to be market friendly. His ideology is to cut the deep federal bureaucracy and regulations and reduce budget deficit and debt so that the economy can grow faster competitively through markets with lower inflation. The short background of the topic is as follows. Unlike in Sri Lanka, Donald Trump has already commenced historic actions against the corruption of the federal government as promised at the Presidential election. As promised, he immediately after taking oath on 20 January 2025 established the Department of Government Efficiency (DOGE) headed by Elon Musk, a top global businessman in the US, to audit all federal government agencies, assess the performance and efficiency on tax payers' money, detect wasteful spending and close or reform such agencies without delay. The D...

  Article's purpose and background The purpose of this article is to highlight the possibility of favorable effects of the US President Donald Trump's expected intervention in the US Central Bank, Federal Reserve (Fed), on central banks across the world. Its background is as follows. Donald Trump at his political campaign for the US Presidency effective from 20 January 2025 made a promise to establish the Department of the Government Efficiency (DOGE) co-headed by Elon Musk and Vivek Ramaswamy.  The promised mandate of the DOGE was to audit federal agencies, cut wasteful spending and reduce fiscal spending by about US$ 2 trillion to cut the fiscal deficit. The other objective of the DOGE is to cut the deep federal bureaucracy in order to further promote the market-based economy. Accordingly, the DOGE has commenced a swing of examining of spending of federal agencies and detected a large number of unproductive spending. As the first step, the DOGE team has got the access to the...

  Article's Purpose The purpose of this article is to highlight grave concerns over the monetary policy that has miserably failed to maintain the price stability in the year 2024 as set out in the statute and its likely contagion over the year 2025 and beyond. What is the price stability mandate? It is the maintenance of percentage increase of the quarterly average consumer price index within 3%-7% with a hypothetical middle target of 5% as set out in the monetary policy framework agreement reached between the Minister of Finance and Central Bank (CB) inconsistent with the current macroeconomic fundamentals of the economy. Why price stability has failed? The economy has confronted a four-month long deflationary trap with nine months violating the mandatory 3%-7% inflation target. The CB also predicts deflationary trend to be continued in 2025 and 2026 too. The manner in which inflation fast accelerated in 2022 and decelerated in return-post in 2023 and 2024 is self-explanatory for ...