Sunday, June 16, 2024

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Sri Lanka Original Narrative Summary: 22/01

  1. World Bank projects Sri Lanka to have the lowest growth (-4.2%) among 148 countries in 2023: in January 2022, Sri Lanka’s 2022 growth was projected at +4% while the projection for 2023 was +4.5%: however, all estimates reversed dramatically after the debt default announcement of 12th April 2022, and economy commenced contraction.
  2. Central Bank to issue its largest-ever stock of Treasury Bills in its 100-year history next week, with a staggering issue of Rs.120 bn: previous highest T-Bill issue was Rs.98 bn issued on 5 occasions – 8Jun’22, 15Jun’22, 14Dec’22, 28Dec’22 & 4Jan’23: T-Bill investments generally considered “risk-free” as the CB is mandated to “print” money and repay, if the Govt is unable to pay.
  3. World Bank says Sri Lanka’s food inflation in 2022 of 64% was the 6th highest in the world: the countries ahead were Zimbabwe (376%), Lebanon (171%), Venezuela (158%), Argentina (94%) and Turkey (77%).
  4. Professionals including medical practitioners stage protest outside Finance Ministry and demand fair taxes: voice opposition against the increasing cost of living: Police, Riot Police and Navy force the protestors to spread out.
  5. Public Utilities Commission agrees to the Cabinet Decision on a retrospective electricity tariff hike with immediate effect, after a meeting with President Ranil Wickremesinghe.
  6. National People’s Power Leader Anura Kumara Dissanayake proposes 75% cut to the salaries of Local Govt councillors if the Govt claims it lacks the funds to hold Local Govt elections.
  7. Fitch Ratings downgrades National Long-Term Ratings of 5 Finance and Leasing companies – People’s Leasing, Central Finance, CBC Finance, HNB Finance and Siyapatha Finance: downgrades follow similar recent action on 10 banks and several insurance companies, consequent to the debt default.
  8. Govt stipulates new Maximum Retail Price for eggs for the 2nd time: white egg – Rs.44, brown egg – Rs.46.
  9. Senior Govt source reveals Finance Ministry is struggling to “find” Rs.55 bn to pay for coal shipments: Rs.20 bn “found” and negotiations said to be ongoing to “find” balance: CEB Engineers warn of dire consequences if money is not “found” and coal is not imported by the month’s end.
  10. Industry report reveals Tea exports dropped to a 25-year low in 2022, hit by the fertilizer shortage due to agrochemical ban: only 250 mn kgs of tea was exported in 2022 – 13% down, compared to 2021 and lowest since 1997.

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