Tourism earnings hit $ 500 m target for 2021 By Charumini de Silva Source:ft.lk Industry aims to springboard from recovery to resilience from 2022 onwards Govt. all set to declare 2022 as ‘Visit Sri Lanka Year’ along with Global Communication Campaign Tourism Ministry to set up Special Secretariat to coordinate 5-year GCC activities National Tourism Policy for Sri Lanka to be finalised and implemented from this month The COVID-hit tourism industry has managed to rebound with earnings of over $ 500 million in 2021. “Tourism holds a greater significance in the services sector and has been a driver of growth for the economy. The industry was the most vulnerable to COVID-pandemic, but it has proven again its resilience with remarkable resurgence. The year ended with 194,495 tourists, with earnings surpassing the target of $ 500 million,” Sri Lanka Tourism Development Authority (SLTDA) Director-General Dhammika Wijayasingha told the Daily FT. As ...

Read More →

SRI LANKA NEWS (DECEMBER 2021) Compiled by Victor Melder. Sri Lanka’s inflation, as measured by the change in the Colombo Consumers’ Price Index (CCPI) increased to 9.9 percent in November 2021 from 7.6 percent in the previous month, the Department of Census and Statistics reported Tuesday. The CCPI for all items for the month of November 2021 increased to 150.7 from 146.9 in October 2021. With respect to October 2021, the reported inflation for November 2021 was mainly due to the higher price levels prevailed in the month, the Department of Census and Statistics said. As a result, the Year on Year inflation of Food Group increased to 17.5 percent in November 2021 from 12.8 percent in October 2021 and the Year on Year inflation of Non Food Group increased to 6.4 percent in November 2021 from 5.4 percent in October 2021. For the month of November 2021, on year‐to‐year ...

Read More →

Seeking outside help on bended knees won’t solve SL’s debt woes: Cabraal-By Nishel Fernando Source:Dailymirror Says govt.’s unique approach to current economic woes will transform SL’s external sector and debt profile for better  Reiterates reaching out to IMF will not solve current crisis Assures govt. is equipped with tools and expertise to find solutions within country Says ongoing national debt restructuring exercise is not much different to a corporate debt restructuring process Assures soft landing for COVID-hit biz and individuals, once moratoria end Central Bank Governor Ajith Nivard Cabraal sees a rare silver lining for the country to transform its external sector and the debt profile to a much resilient and sustainable position, with the unique approach taken by the government to emerge out of the current external sector crisis, instead of bending the knees to the International Monetary Fund (IMF). “Every crisis has a silver lining and we should ...

Read More →

Lowering of interest rates only escalates bank profits – by Sunil Thenabadu The motive of the government decision to lower the interest rates of deposits was predominantly to engross the banks to lend at lower interest rates  for entrepreneurs to boost the economy of the country which is in dire straits.However would this proposal prove productive?  Owing to this absurd stunt has left the senior citizens and pensioners high and dry resulting in unprecedented agony and anguish.Many who are victims have  highlighted to the media  the grievances on behalf of so many distraught senior citizens and pensioners particularly as many  have no access to the media. This much spoken of government’s harsh decision to lower interest rates has made the lives of senior citizen’s and pensioners miserable with escalating high cost of living, Skyrocketing  cost of medical expenses etc.It is pertinent to mention that monthly interest rates on fixed deposits which they mostly rely upon have been reduced to alarmingly low 4% and 5 % which has added to the woes already the senior ...

Read More →

The economy of Sri Lanka: Is there a way out? By by Prof. Arusha Cooray Source:island.lk Sri Lanka is currently facing an unprecedented set of economic challenges: a large and increasing public debt, rising fiscal and current account deficits, foreign exchange shortages and declining investor confidence. The collapse of tourist revenues and remittances due to the pandemic, have compounded the situation. Sri Lanka’s foreign exchange reserves are at an all-time low, currently sufficient to cover two months of imports. As a rule of thumb, a country’s foreign exchange reserves should be sufficient for at least three months of imports. The fall in foreign exchange reserves has led to a depreciation of the rupee against the US dollar, making it more difficult to service the debt denominated in foreign currency. Sri Lanka’s debt to GDP ratio currently stands at 101%. Businesses relying on imports are struggling to meet foreign currency payables. ...

Read More →

Daunting task for government amid sliding economy  By Sunil Thenabadu The landslide resounding victory of the SLPP sweeping aside all opposing political parties in year 2020 like a “tsunami” would never have been even in the wildest dreams of any staunch supporter of the party. However the top-notch politicians prior to the postponed election knew well the pathetic situation our economy was in, was aware of a daunting task for any new government.  Although the victory at the polls was a cake walk, astounding music to the ‘SLPP”,  the new government which is burdened with an enormous intimidating state of affairs to place the system on track in the midst of a global recession and rising job losses. With negative growth predictions, no budget for the entire 2020, with negligible taxes figures with another hurdle is the climbing of tax issues in year 2021.  So far, figures indicate at least half a million workers – directly and indirectly – have lost their jobs largely in ...

Read More →

Lowering of interest rates of deposits only escalates bank profits – by Sunil Thenabadu in Brisbane The motive of the government decision to lower the interest rates of deposits was predominantly to engross the banks to lend at lower interest rates for entrepreneurs to boost the economy of the country which is in dire straits. However, would this proposal prove productive? Obviously not so practically or on paper.as at date if statistics are searched in relation to the benefit reaped by the entrepreneurs a much larger percentage of depositors have been deprived of receiving a sizeable interest component. The Fixed Deposit interest rates have been drastically reduced from around 11% per annum to alarmingly lower rate of just 4 % which  has caused a financial distress for the depositors most are retirees who had invested their life long savings and gratuity money at retirement. With the escalating cost of living, with the ...

Read More →

Notable economic recovery by last quarter 2021 – CBSL-by Indunil Hewage Source:Dailynews Sri Lanka’s first quarter growth would be better than expected, Central Bank Governor Prof. W D Lakshman said. Despite the fact that GDP estimates for the first quarter of 2021 have not been released, Governor Prof. Lakshman said Sri Lankan economy is likely to have recorded a higher than expected growth rate in the first quarter of 2021 based on several information such as Index of Industrial Production, Agricultural sector performance and private credit, etc. “We’re pleased to observe positive developments on many fronts particularly during the first quarter. As COVID related lock downs are gradually removed and then with the vaccination drive which is in full force, we expect a notable recovery by the last quarter of the year.” ...

Read More →

Central Bank Governor’s Statement on Foreign Currency Liquidity in Domestic Market Source: Biz English   Over the past few days, concerns have been raised by various individuals and media about an assumed shortage of foreign currency liquidity in the domestic market, preventing banks from facilitating imports. Reports published or circulated by some media channels indicate seriously negative viewpoints which can be very harmful to the country. I wish to make the following statement to explain the true position about this subject. Due to heavy foreign currency borrowings in the past several years, there was adverse speculation, even by the time of the formation of the present Government in 2019/2020, about Sri Lanka’s ability to service its debt service obligations falling due in the near term. In spite of such speculation, and amidst added pressures owing to the COVID-19 pandemic on particularly our tourism cash flows, the Government of Sri Lanka ...

Read More →

    SRI LANKA NEWS (SEPTEMBER 2019) – Compiled by Victor Melder.   Sri Lanka’s gross official reserves were 8,532.6 million US dollars by the end of August, up from 8,343.9 million US dollars in July, latest Central Bank data showed. By the end of August, foreign currency reserves were 7,494.7 million dollars while the reserve position in the IMF was 65.5 million dollars. Special Drawing Rights were 14.5 million, reserves in Gold were 956.8 million and other reserve assets were 1.1 million US dollars. The outstanding stock of T-bills and T-bonds held by foreigners decreased by 0.45 percent during the week compared to the previous week. During the year up to 6th September 2019, the Sri Lanka rupee has appreciated against the US dollar by 1.2 percent. (Daily Island, 9.9.2019) The first-ever anti-venom serum developed in Sri Lanka to treat snake bites victims is expected to be introduced to ...

Read More →