Sri Lanka’s Gross Domestic Product (GDP) is estimated to have contracted 11.5 percent in the first quarter of 2023 from a year ago amid high interest rates, increased input prices, import restrictions and lower earnings from apparel exports, the Department of Census and Statistics (DCS)
The state-owned enterprises (SOEs) should be unchained from government control, regardless of whether they are profit or loss-making, if the benefits arising from their performance are to flow into the national economy, said Suresh Shah, the head of the SOE Restructuring Unit.
Despite various negative projections by multilateral agencies and even by the country’s Central Bank, Sri Lanka would record positive economic growth in the final quarter of this year, Finance State Minister Ranjith Siyambalapiriya said.
Sri Lanka’s tea exporters yesterday expressed “deep concerns” over the government’s decision to abolish the Simplified Value-Added Tax (SVAT) system as they fear the move will create cash flow difficulties for them among several other issues.
As Sri Lanka is looking to support the poor and vulnerable population, which has significantly expanded since the pandemic and economic crisis, Colombo-based policy think tank LIRNEasia urged the government to reopen the registration of the new welfare scheme ‘Aswesuma’, so that the right candidates are captured in the system.
Sri Lanka’s apparel sector would face a major setback if it fails to renew the GSP Plus tariff concession from the European Union (EU), the Joint Apparel Association Forum (JAAF) cautioned, as the collective loss for the industry would amount to about US $ 494 million in exports.
The months-long contraction in credit to the private sector somewhat moderated in April in a sign of bottoming out ahead of further easing in the interest rates in the months to come with the beginning of a monetary easing cycle set off last week.
Sri Lanka’s economy is showing tentative signs of improvement, due to the implementation of critical policy actions, acknowledged visiting senior International Monetary Fund (IMF) official but noted recovery remains challenging.
The Central Bank yesterday delivered a surprise policy rate cut, bringing nearly two years long tightening cycle to a close and left open the door for further rate cuts in the next few months among other measures to ease remaining restrictions on imports to reverse the prolonged economic contraction.
In a bid to support the country’s small and medium-sized enterprises’ (SMEs) access to commercial loans, the government is moving towards operationalising the Asian Development Bank (ADB)-backed National Credit Guarantee Institution (NCGI) initiative as a public-private partnership (PPP), with an initial capital infusion of around US $ 110 million.
The government is likely to raise the domestic debt ceiling for this year in the coming months in order to raise the required funds via selling government securities to rehabilitate and maintain the country’s critical road infrastructure that is in need of urgent attention.
Sri Lanka’s Board of Investment (BOI) has increased the foreign direct investment (FDI) target to US$ 2 billion from earlier US$ 1.3 billion for the year as foreign investors are returning to the country following a troubled year and given the possibility of realising big ticket investment pertaining to an oil refinery in Hambantota.
Sri Lanka’s merchandise exports plunged 16.5 percent year-on-year (YoY) to US $ 814.1 million in April, bringing the cumulative export earnings for the first four months of 2023 to US $ 3.81 billion, an decrease of 9.78 percent YoY, data from the Export Development Board (EDB) showed.
Sri Lanka needs to step up efforts in enticing a larger proportion of its population across all provinces towards embracing entrepreneurship so that the impacts of the ongoing economic crisis would lessen, the Central Bank asserted.
Sri Lanka has failed to fulfil two of the International Monetary Fund (IMF) programme commitments that were due in April 2023, publicfinance.lk, a platform for public finance-related information in Sri Lanka run by Colombo-based think tank Verité Research, revealed.
Given the precarious state of the public finances, a former central banker warned that the proposed domestic debt optimisation (DDO) is unlikely to be implemented on voluntary terms, despite the assurances given by the Central Bank and Treasury.
The government is mulling strict measures to rectify the prices of imported goods, if the traders fail to pass down the benefits of the recent appreciation of the rupee against the US dollar to the consumer.
Sri Lanka’s rupee further appreciated against the US dollar (US$) yesterday dropping below Rs.300 for the first time since April last year as the Central Bank (CB) took a breather from its dollar purchases to allow consumption to rebound.
National carrier SriLankan Airlines is expecting to wrap up its re-fleeting exercise, which got the Cabinet approval last year, in the next two to three months, acquiring at least seven aircraft in the first phase, a top official said.
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