Colombo (LNW): President Ranil Wickremesinghe has issued an extraordinary gazette taking over two government bodies under to the Ministry of Transport and Highways and the Ministry of Urban Development.
These two government institutions are:
Sahasya Investment Limited National Equipment and Machinery Organisation
These institutions from hereon will be serving under the purview of the Ministry of Finance, Economic Stabilisation and National Policies.
The gazette also declares certain changes in the scopes of several ministries.
Colombo (LNW): Except for a few showers in Western and Sabaragamuwa provinces and in Galle and Matara districts, mainly fair weather will prevail elsewhere over the Island, the Department of Meteorology said in its daily weather forecast today (02).
Fairly strong winds about (40-45) kmph can be expected at times in western slopes of the central hills, Northern, North-Central, Southern and North-Western provinces, and in Trincomalee district, the statement added.
Marine Weather:
Condition of Rain:
Showers may occur at a few places in the sea areas off the coast extending from Colombo to Matara via Galle.
Winds:
Winds will be south-westerly and speed will be (30-40) kmph. Wind speed may increase up to (55-65)kmph at times in the sea areas off the coast extending from Hambantota to Pottuvil and the sea area off the coast extending from Puttalam to Kankasanthurai via Mannar. Wind speed may increase up to (45-55)kmph at times in the other sea areasaround the island.
State of Sea:
The sea areas off the coast extending from Hambantota to Pottuvil and the sea area off the coast extending from Puttalam to Kankasanthurai via Mannar will be rough at times. The other sea areas around the island may fairly rough at times.
Colombo (LNW): The Central Bank of Sri Lanka (CBSL) published its inaugural Monetary Policy Report (MPR) on Monday (July 31).
The publication of the Monetary Policy Report marks an important step towards improving the transparency of monetary policy and is expected to promote engagement with all stakeholders of the economy through the dissemination of information that was considered by the Monetary Board of the Central Bank of Sri Lanka in the formulation of monetary policy decisions, the Central Bank said in a statement.
The MPR presents the Central Bank’s assessment of the future trajectory of inflation and other key macroeconomic variables based on the analysis of the current macroeconomic developments on the domestic and global fronts, and their outlook.
The MPR also aims to provide an assessment of the balance of risks to the projections on inflation and economic growth considering the ongoing and expected developments. Such assessment would help provide greater clarity to all stakeholders on the thinking of the Monetary Board when arriving at monetary policy decisions.
The Central Bank said it would publish the MPR in January and July each year in line with the major monetary policy review cycles that update medium-term projections.
In doing so, the Central Bank would provide data-driven and forward-looking information to all stakeholders in a timely manner. This would enhance the transparency and accountability of the monetary policy making of the Central Bank, while assisting in the anchoring of inflation expectations of the general public.
The MPR will complement the existing communication on the monetary policy process of the Central Bank, including the Monetary Policy Review press release, press conference proceedings, and other communiqués featured on the official website and social media of the Central Bank.
Colombo (LNW): As per the latest data from the Central Bank, cumulative export earnings during January to June 2023 registered a 10% decrease year-on-year (YoY) to $5.87 billion, whilst import expenditure during the same period saw a substantial decline of 18.6% YoY to $ 8.16 billion.
It also noted the deficit in the trade account from January to June 2023 narrowed to $ 2.89 billion, a considerable improvement from the $ 3.5 billion recorded during the same period in 2022.
As the country continues its journey towards economic recovery, maintaining this positive trend and addressing structural vulnerabilities will be crucial in ensuring long-term economic stability. Thus, the narrowing trade deficit showcases some progress in managing trade imbalances.
In June, earnings from exports declined by 19.5% YoY to just over $ 1 billion. The Central Bank noted that this decline mainly reflected the high base in June 2022, and all major subcategories of merchandise exports recorded a decline in June 2023 compared to year earlier.
However, in contrast, expenditure on imports increased by 11.6% $ 1.36 billion in June 2023, compared to $ 1.22 billion in June 2022. The Central Bank said the increase in import expenditure was observed across all main categories of imports, which was supported by the significantly low base in June 2022.
Detailing the imports, it said the biggest intermediate goods category of imports in June saw a rise of 7.3% YoY to $ 875.4 million, which also includes fuel bills rising by 45% YoY to $ 290 million and investment goods marginally increasing by 2.5% YoY to $ 239.9 million and consumer goods imports increased significantly by 42.6% YoY to $ 251.7 million.
The Central Bank said the relaxation of import restrictions, commenced during June and July 2023, could gradually generate higher import expenditure in the period ahead.
Expenditure on the importation of consumer goods increased in June 2023, compared to a year ago, driven by the increases in expenditure on both food and non-food consumer goods. Expenditure on food and beverages increased due to the increase in import volumes of sugar; oils and fats (primarily, coconut oil); and vegetables (primarily, lentils).
A sizeable increase in expenditure on non-food consumer goods was due to the imports of medical and pharmaceuticals (mainly, medicaments), telecommunication devices (mainly, mobile telephones), and cosmetics and toiletries.
Expenditure on the importation of intermediate goods also increased in June 2023, mainly driven by the imports of fuel and base metals (mainly, iron and non-alloy steel). Import volumes of crude oil and refined petroleum increased in June YoY, although coal imports remained limited due to the off-season.
Colombo (LNW): Sri Lanka’s construction industry has been greatly affected for the last two years, even before the economic crisis took place in April 2022, due to a lack of new projects and the higher cost of construction.
However, the recent import relaxation on some 30 construction-related materials could give some hope to the sector, which has been one of the main drivers of economic growth in the past years.
Sri Lanka’s construction industry is expected to grow by 9.2% to reach Rs. 1,535 billion in 2023.
Despite near-term challenges in certain construction sectors, it predicts that the medium to long-term growth story in Sri Lanka remains intact as the construction industry in Sri Lanka is expected to grow steadily from Q2 2023 to Q1 2024.
The growth momentum is expected to continue over the forecast period, recording a CAGR of 7.6% during 2023-2027 while the construction output in the country is expected to reach Rs. 2,058.3 billion by 2027.
According to a newly released report on the construction PMI survey, Sri Lanka’s construction industry remained contracted in June 2023 amid the lack of new projects, recording a total activity index value of 44.4.
The Central Bank yesterday said from June onwards the construction PMI survey results will be released to the public every month, similar to the PMI surveys on manufacturing and services.
The Statistics Department of the Central Bank has been conducting the PMI survey for construction activities since June 2017, delivering key industry insights to the Central Bank, assisting the policy formulation process.
According to the June survey, most of the construction sector companies operate at a sub-optimal level amid the limited availability of construction projects. An index value less than 50 indicates a contraction.
However, several respondents had mentioned that the steady decline in material prices has induced to commence small-scale construction work.
The continued decrease in new orders also reflected the lack of new projects.
The respondents had mentioned that sizable projects were hardly available, except for some foreign-funded projects, and the bidding for available tenders was also highly competitive.
However, they expect the suspended large-scale projects to gradually recommence later in the year.
Further, employment in the country’s construction sector remained contracted in June, mainly due to the layoffs after project completions.
Quantity of purchases also declined in line with the decrease in pipeline projects while suppliers’ delivery time remained shortened during the month due to low order quantities.
Colombo (LNW): The government authorities are carrying out a domestic debt restructuring process or debt optimization (central bank’s term) under a well designed plan to attract the attention of creditors and if it fails to gain their consent then avoiding doing more harm than good might be very difficult, official sources claimed.
To ensure that it is done right the first time, sovereign domestic debt restructuring should be part of a broader policy package that effectively addresses the fundamental problems and debt vulnerabilities, it added.
The island nation is persuading domestic creditors for a moratorium on debt repayments to manage Sri Lanka’s public debt rollover risks in the future as it has become essential to tackle the debt crisis.
At the recent investor presentation on DDO conducted on July 07, the response of participants was positive but there was no indication for an agreement for the government’s policy actions and a comprehensive debt treatment, informed official sources reveled.
To garner broad creditor participation in the restructuring and reduce the likelihood of costly litigation, the process of restructuring has to be perceived as fair and transparent.
International Monetary Fund (IMF) is likely to suggest some amendments to their Debt Sustainability Analysis (“DSA”) targets by considering the slow progress of achieving economic reform program commitments to ensure that the country restores the sustainability of its public debt
Its first policy review in September, the IMF may direct Sri Lanka towards the second Domestic Debt Optimization (DDO) strategy if the targets of the current plan are not achieved, official sources warned.
According to the central bank governor Nandalal Weerasinghe “if the country deviates from the current path, there could be another domestic debt optimization as well as another default and bankruptcy.
On the other hand the government is facing a daunting tasks of reducing its debt stock to 95 percent in 2032 from 128 percent in 2022, bringing down of GFN target to 13 percent of GDP in 2027-32 from 34.6 percent in 2022 and reduce FX debt service target to 4.5percent of GDP in 2027-32 from 9.4 percent in 2022.
Although it is branded as double edged sword by opposition politicians and some economic experts, the need to manage Sri Lanka’s public debt rollover risks in the future has become essential to tackle the debt crisis, former finance minister Ravi Karunanayake disclosed.
Restructuring domestic debt is a tool for the country facing fiscal and economic stress. And it should not drag into the second round of restructuring, he said adding that IMF is flexible to consider the government’s situation and accommodate its proposals and explanations relating to implantation of economic reforms.
Colombo (LNW): The Foreign Employment Bureau of Sri Lanka (SLBFE) has announced dates for the 2023 Skill tests for Japan Specified Skilled Jobs (SSW).
Accordingly, skill tests will be held in August and September 2023, and include basic language tests, nursing care workers, the food service industry, and agriculture.
Local agents Colombo Logistics Group owned by Mr Eric Ambalangodage.
12 Fuel stations to start immediately and go upto 150 as planned.
Colombo (LNW): Sinopec has commenced discharging their first cargo from Mt. SI CHOU ZHI LU, petrol and Diesel 4950MT. The second cargo will be discharged tomorrow according to news.
Reliable sources state that Colombo Logistics owned by veteran businessman Mr Eric Ambalangodage is the local agent and logistics partner of Sinopec.
The fuel station dealers will sign the agreements with sinopec shortly after which they will operate 150 stations islandwide as planned; However initially they will operate 12 stations according to reliable sources.
Industry sources further state that this is a big victory for the country as the consumer is expected to largely benefit from the creation of competition amongst the many operators. LIOC is already an operator in the country for many years and have helped create that competition.
Looking back at history, in 1958 the then prime minister of Sri Lanka Mr Bandaranayaka nationalised the companies that were operating in the country overnight and formed Ceylon petroleum corporation (CPC). The companies that were nationalised were Mobil , shell , standard oil , caltex , Castrol and Esso. It is said that Singapore’s then prime minister Mr Lee Kuan Yew, welcomed these operators with open arms. Now they operate in singapore with full fledged refineries supplying to the region and all of the ASEAN countries.
While reminiscing on another missed opportunity ,one can only imagine had these companies been present in Sri Lanka, how that competition would have assisted the country. The Sri Lankan consumer would have benefited by a far better service and price. What is certain is, had these companies been there last year, we would not have had a fuel crisis .
Let us learn from history and give credit where credit is due.
