By: Staff Writer

Colombo (LNW): The Government is set to sign the impending free trade agreement (FTA) with Thailand within the first quarter of 2024 at least by March, to boost exports from the country by three folds to $ 1.5 billion.

Sri Lanka exports to Thailand last year and year before stood at US $ 62 million varying it from $58 million in 2018, $101 million in 2019 and $ 39 million in 2020.

Imports from Thailand has come down to $293 million due to government’s restrictions from $ 497 in 2018, $437 million in 2019 $ 363 in 2020 and $398 million in 2021, finance ministry data shows.

This was clear indication of the trade between the two countries favorable for Thailand during the past five years.

.Inking the FTA with Thailand is the first step to joining the Regional Comprehensive Economic Partnership (RCEP) trade agreement and a step towards strengthening traditional ties with the country.

Sri Lanka and Thailand initiated the proposal in 2016, and the negotiations commenced in 2018 with two rounds of discussions in the same year, whilst the third round of discussion concluded in January 2023.

President Ranil Wickremesinghe briefed the Cabinet on the progress of the discussions between the two countries, including the deal with trade in goods and services, investment rules, customs cooperation, trade facilitation and economic cooperation.

Cabinet spokesman Bandula Gunawardena disclosed that the objective of the Government is to boost exports from the current $ 550 million to $ 1.5 billion via Sri Lanka and Thailand FTA.

“Bilateral, regional and multilateral trade and investment agreements encourage boosting foreign inflows which is critical for Sri Lanka right now. These FTA are tools to boost the foreign inflows into the country to reduce the burden on the current account,” Gunawardena explained.

Accordingly, negotiations pertaining to the proposed FTA are scheduled to conclude in February 2024, as per the information presented by the President on the progress of the fifth round of negotiations on the proposed trade agreement, during the cabinet meeting held July 24.

The fifth round of negotiations on the proposed agreement was held in Colombo from 26 -28 June, during which discussions regarding customs cooperation and trade facilitation, economic cooperation as well as sanitary and phytosanitary chapters were completed.

The next round of negotiations is scheduled to take place in Thailand from August 21st to 23rd, 2023. Three additional rounds are planned to conclude the Agreement by February 2024, with the signing expected to occur in March 2024.

Sri Lanka aims to expand its economic reach first within South Asia and then extend further eastward to become a part of the Regional Comprehensive Economic Partnership (RCEP).

Sri Lanka will formally request the member countries of RCEP to support its application. Given Thailand’s active participation in both ASEAN and RCEP, Sri Lanka will seek Thailand’s support in joining RCEP.

By: Staff Writer

Colombo (LNW): Sri Lanka’s interest payments reach highest levels worsening debt burden, a leading economic research agency Verité Research highlighted.

Sri Lanka is continuing to spend a substantial amount of its earnings for its interest payment on public debt this year, Finance Ministry data shows.

The interest expenditure on public debt will be the largest item in all previous budgets presented in parliament during the past several decades up to now,finance ministry dotces said.

Sri Lanka’s debt-to-GDP ratio is increasing alarmingly owing to high interest payments, limited access to global financial markets, and dwindling revenues.

Based on the Central Bank data, Verité Research recently pointed out that Sri Lanka’s interest payments had reached their highest levels in 2022..

This increase in interest payments suggests a significant debt burden on the government. The ratio of interest payments to total government revenue has surged from 35 percent in 2015 to a striking 78 percent in 2022.

Notably, there was a substantial rise in interest payments between 2019 and 2020, with payments escalating from 47 percent to 71 percent, mainly due to a substantial fall in government revenue, as a result of the tax cuts in late 2019 and early 2020.

This increase in interest payments suggests a significant debt burden on the government

Total government revenue in the first four months of 2023 was Rs. 821.35 billion whereas the total expenditure on interest payments for domestic and foreign debt stood at Rs. 818. 97 billion in the same period. The revenue and interest payments all most equal with slight difference of Rs. 2.38 billion

In comparison with the year 2022 figures, the total revenue in the first four months posted as Rs 631.13 billion while the payment of interest rate for total debt recorded at Rs.426.79 billion

Accordingly there was a substantial revenue surplus of Rs.204.34 billion after the payment of debt interest at that time, finance ministry data shows.

Interest payments on foreign debt fell by 64.9 percent to Rs. 29.8 billion in the first four months of 2023, compared to Rs. 84.9 billion in the same period of 2022 whereas interest payment for domestic debt increased by 130.8 percent to Rs. 789.1 billion in the first four months of 2023 from Rs. 341.9 billion in the same period of 2022.

Total government revenue in the first four months of 2023 increased by 30.0 percent to Rs. 820.1 billion From Rs. 630.9 billion in the same period of 2022,

The total expenditure on interest payments including both domestic and foreign debt increased by 16.5 percent to Rs. 426.8 billion in the first four months of 2022; compared to Rs. 366.2 billion in the same period of 2021, latest finance ministry fiscal report revealed

Interest payments on foreign debt fell by 8.1 percent to Rs. 84.9 billion in the first four months of 2022, compared to Rs. 92.4 billion in the same period of 2021 whereas interest payment for domestic debt increased by 24.8 percent to Rs. 341.9 billion in the first four months of 2022 from Rs. 273.8 billion in the same period of 2021.

Colombo (LNW): The Cabinet has granted approval to enter an agreement with the World Bank to obtain US $ 200 million for welfare benefit, announced Cabinet Spokesman Bandula Gunawardena.

The scheme will be granted in three components, namely US $ 185 million for the ‘Aswesuma’ welfare benefit scheme, US $ 07 million for a pilot project to economically assist selected beneficiaries, and US $ 08 million to strengthen the entire project management and social security system under the project, he said.

The government of Sri Lanka, accordingly, will be signing this new agreement with the WB soon, the Minister added.

Colombo (LNW): Minister of Trade, Commerce and Food Security Nalin Fernando has issued a new directive on the price of eggs imported from India.

Accordingly, imported eggs from India will be sold for Rs. 35 each, and boxes of imported eggs will be sold for Rs. 40 per egg.

The imported eggs at the aforementioned prices will be available at LANKA SATHOSA outlets and other supermarkets from today (25), Fernando said.