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Govt. vows to implement IMF reform agenda for economic recovery

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Govt. vows to implement IMF reform agenda for economic recovery

By: Staff Writer

Colombo (LNW): The government will continue to implement our reform agenda in order to support Sri Lanka’s economic recovery and successfully complete the IMF program.

Despite the ambitious fiscal consolidation efforts, Sri Lanka’s public debt trajectory is set to remain unsustainable in the absence of a comprehensive debt treatment,”Finance ministry and Central Bank heads said. .

As per the IMF program, state authorities are fully committed to achieving fiscal consolidation and implementing fiscal structural reforms; restoring public debt sustainability; restoring price stability and rebuilding external buffers; safeguarding financial system stability; and reducing corruption vulnerabilities and further introducing growth-enhancing reforms,” they said.

Global creditors and investors were told that Sri Lankan people are the Government’s priority, and as part of the IMF program, it aims to enhance the existing social safety nets to protect the most vulnerable.

As a result, Sri Lanka’s economy has already shown some encouraging stabilization signs, with year-on-year inflation slowing down and earnings from tourism rebounding to more standard levels.

Sri Lanka day before yesterday held an investor presentation in order to explain the current macro economic situation and outlined the key pillars and objectives of the IMF program as well as the next steps with regard to the engagement with creditors.

Treasury Secretary Mahinda Siriwardena and Central Bank Governor Dr. Nandalal Weerasinghe told the virtual presentation that Sri Lankan Government has embarked on an ambitious reform agenda, and we have successfully achieved all prior actions required to unlock the IMF financing.

It was noted that Sri Lanka is also facing a significant external financing gap over the IMF program period. This financing gap will have to be covered through new external funding and external debt service relief.

The Authorities are also exploring options for a domestic debt optimization (DDO) operation aimed at liquidity relief while preserving financial stability to avoid further erosion of Sri Lanka’s repayment capacity. It is envisaged that this DDO will be conducted on a voluntary basis and be based on our consultations with major T-Bonds holders.

“As we move ahead, we are looking forward to accelerating and intensifying engagement with all our creditors in a transparent way, in good faith, and we are hoping to reach debt treatment agreements that are consistent with the IMF debt sustainability analysis and with the comparability of treatment principle,” Treasury Secretary and CBSL Governor said.

On 20 March 2023, the IMF Board approved Sri Lanka›s IMF program, unlocking up to $7 billion in funding from the IMF and other IFIs.

The IMF program provides a clear roadmap in terms of policy implementation and will stabilize the economy of Sri Lanka and allow the country to regain its growth potential and address its economic vulnerabilities.

Ministry of Transport Reduces Expressway Bus Fares in Response to Fuel Price Revision

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Ministry of Transport Reduces Expressway Bus Fares in Response to Fuel Price Revision

Starting today, March 31st 2023, the Ministry of Transport has announced a reduction in the fares of expressway buses. The revised fares are in line with the recent revision of fuel prices. Passengers can now enjoy the amended fares, which are as follows:

Sri Lanka ready to attract green energy investments:

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Sri Lanka ready to attract green energy investments:

By: Staff Writer

Colombo (LNW): Sri Lanka is to mobilize green energy investments in the energy sector and invites local and foreign direct investments for that purpose, Senior Advisor to the President on Climate Change Ruwan Wijewardene said.

He revealed this government plan on green energy investments while delivering the welcome address of the Sri Lanka Clean Energy Summit 2023 held at Kingsbury Hotel, Colombo on Tuesday.

This Summit was a great opportunity for investors to find and identify green energy investment opportunities in Sri Lanka’s energy sector and the private sector is crucial in developing and deploying renewable energy technology, he said.

He also mentioned that Sri Lanka is a very rare example of a country that has achieved higher human development while managing CO2 emissions well below the Paris Agreement.

Also he said that as a party to the Paris Agreement, Sri Lanka is also committed in reducing the greenhouse gas emissions by 14.5% by 2030.

Correspondingly, the country is further committed to achieve a 70% share of renewable energy in electricity requirements by 2030, Carbon neutrality by 2050 in electricity generation and no further capacity addition of unabated coal power generation.

Advisor to the President on Climate Change Erik Solheim claimed that it is the vision of President Ranil Wickremesinghe to take Sri Lanka out of the crisis in a green space.

Solheim said that the two biggest developing countries China and India are now the two leaders of the Green Revolution while pointing out that Sri Lanka, with such a good relationship with China, as well as India, has enormous opportunity to move towards a green economy.

Minister of Power and Energy Kanchana Wijesekera said that his role as the Minister is to facilitate the rapid changes required to keep Sri Lanka globally competitive.

The mentality of most of the state institutions needs to be buried and an innovative mind-set both in management and process must be introduced, the Minister said.

Thus, Minister Wijesekera pointed out the first part of his agenda is to set the institutional framework for this purpose but some people think the sole purpose of the reform agenda is to privatize the Ceylon Electricity Board, but in fact it is much broader.

He added that they are setting up the sectorial Government’s framework for a power future breaking free from institutional framework.

Secretary of the Ministry of Environment Dr. Anil Jasinghe while addressing the conference said that it is the Government’s expectation to increase Sri Lanka’s forest cover up to 32%, and that it cannot be done just by conventional methods.

For that purpose, Carbon credit concept will be used. He pointed out that the country can earn income by doing so and increase the forest cover.

Veteran Actor Amarasiri Kalansuriya passes away

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Veteran Actor Amarasiri Kalansuriya passes away

Veteran actor Amarasiri Kalansuriya has passed away at the age of 82.

Amarasiri Kalansuriya, widely known as Kalan, has left an indelible mark on Sri Lankan cinema, theatre, and television. He made his debut in the film industry with Hanthana Kathawa, in which he acted alongside Vijaya Kumaratunga. However, it was his remarkable performance in Ahas Gauwa, which won him the Best Actor award in 1974, that established him as a talented actor.

Throughout his illustrious career, Kalan acted in various notable films, including Ahas Gauwa, Akkara Paha, Nimwalalla, Tharangā, Bambaru Avith, Apēkṣhā, Anūpamā, Poḍi Mallī, Kānchanā, Parityāgaya, Sinhabāhu, Vajirā, Sakvithi Suvaya, Yasa Isuru, Doringē Sayanaya, Poojā, Poḍi Wijē, Ahas Māḷigā, and Sāgarayak Mada.

Kalan’s exceptional talent and dedication to his craft were recognized throughout his career. He won the Critics’ Award for his outstanding performance in Ahas Gawwa in 1974, and the Sarasaviya Award for Best Supporting Actor in 1982.

In 1986, he was honored with the Presidential Award for Best Supporting Actor for his role in Pooja, in addition to winning the Sarasaviya Award in the same category.

In 2019, Kalan was awarded the ‘Lifetime Achievement Award’ at the Derana Lux Film Awards for his invaluable contributions to the Sri Lankan film industry.

With his impressive body of work and numerous accolades, Kalan will always be remembered as one of Sri Lanka’s most accomplished actors.

SL Trade deficit narrows significantly in February amid declining imports

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SL Trade deficit narrows significantly in February amid declining imports

By: Staff Writer

Colombo (LNW): Sri Lanka’s deficit in the merchandise trade account witnessed a significant contraction in February, due to a significant moderation in the import expenditure, arising out of the aggregate demand conditions.

The deficit in the merchandise trade account narrowed significantly to US dollars 39 million in February 2023, from US dollars 780 million in February 2022, mainly reflecting the impact of significant moderation of import expenditure due to subdued aggregate demand conditions.

This was announced by the Central Bank in its latest report on the external sector performance in February 2023.

The cumulative deficit in the trade account during January-February 2023 was US dollars 449 million,a sizeable decline from US dollars 1,636 million recorded over the same period in 2022.

Despite recording a marginal growth compared to January 2023, earnings from merchandise exports declined by 10.2 per cent in February 2023, year-on-year, to US dollars 982 million. Exports earnings recorded below US dollar 1 billion level for the second consecutive month.

While the decline in earnings was observed across all main categories, industrial exports mainly contributed to the overall contraction. Cumulative export earnings during January-February 2023 declined by 10.7 per cent over the same period in the last year

Earnings from the exports of industrial goods declined in February 2023, compared to February 2022, with a substantial share of the decline being contributed by garments.

Reduced demand from major markets for garments due to unfavourable economic conditions globally mainly contributed for this outcome. Earnings from rubber products continued to decline due to the lower exports of household rubber gloves.

Similarly, earnings from the exports of petroleum products also declined due to the drop in volumes of bunker and aviation fuel exports despite the higher aviation fuel prices. In contrast, earnings from machinery and mechanical appliances (mainly, electronic equipment); and gems, diamonds, and jewellery increased in February 2023.

Earnings from the export of agricultural goods marginally declined in February 2023, compared to a year ago, since the increase in earnings from spices and tea was offset by the decline in earnings from coconut related products (primarily, fibres and desiccated coconut).

Export earnings from spices improved due to higher export volumes of cloves; cinnamon; and nutmeg and mace. Increased earnings from tea exports were mainly due to price increases as the volumes registered a decline.

Earnings from mineral exports declined in February 2023, compared to February 2022, mainly due to the decline in exports of titanium ores.

Expenditure on merchandise imports was almost halved in February 2023 at US dollars 1,021 million, compared to February 2022, recording the lowest imports since May 2020.

All major import sectors declined while the decline in expenditure on intermediate goods was significant.Meanwhile, cumulative import expenditure during January-February 2023 also declined by 37.1 percent over the corresponding period in 2022.

SL Credit card holders restrain spending amid higher interest rates and inflation

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SL Credit card holders restrain spending amid higher interest rates and inflation

By: Staff Writer

Colombo (LNW): The credit card balance, a distant proxy for consumer spending, bucked the recent trend to show a decline in January and the drop in the number of cards in February this year, reflecting some pullback in spending amid higher interest rates and inflation.

In January, the number of active cards also fell by 10,719 cards to 1,942,272, a fraction of Sri Lanka’s working population of roughly 8.5 million it has further come down to. 1,940,872

Sri Lankans, whose real incomes are getting hammered on a daily basis from soaring inflation, have reduced the usage of their credit cards, as there was a significant drop in the outstanding balance of credit cards, when the financial and economic misery became more pronounced.

Outstanding credit card balance has dipped by a little in October in a dual sign that banks may be tightening their credit card standards while consumers are also pulling back on their spending without taking on any more debt as they are fighting the worst cost of living crisis in their lifetime.

The data showed that in January, the total outstanding card balance in commercial banks falling by Rs.1,037 million after rising by Rs.2,675 million in December 2022.

Consumers hit by record high prices and increased borrowing costs appear to have cut back on their purchases.

However, usually in January, consumer credit shows a slowdown after reaching a seasonal high in December untill April festive season, the other major shopping season for Sri Lankans.

In 2022, overall credit declined in response to the economic crisis that sparked a sharp rise in interest rates and inflation, which made financial conditions extremely tight for both businesses and individuals.

While the lending markets have shown signs of slowly picking up with the sharp decline in the prime rate, credit card interest rates still remain at 36 percent, which may prevent people from using their pre-approved card balance for their purchases.

The prime rate fell by 204 basis points last week to settle at 21.74 percent, marking the biggest weekly slump in the benchmark lending rates in recent times for the shorter term facilities for prime and corporate clientele of commercial banks.

Prime rate offers a harbinger for the rest of the market lending rates from small business loans to home mortgages to auto loans to consumer loans.

While credit card usage in Sri Lanka may not provide a full picture of the consumer spending habits given the extremely lower number of active cards, compared to its population, it provides some insights into the direction of consumer spending.

Cards are widely used by the working population who earn a monthly income eligible to own a card for their daily and weekly shopping bills and discretionary spending.


Navy receives maritime interdiction and protective equipment from U.S.

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Navy receives maritime interdiction and protective equipment from U.S.

The Sri Lanka Navy received a stock of maritime interdiction and protective equipment provided by the United States, at the Air Force base Katunayake (27th March 2023).

The Defence Attaché at the U.S. Embassy in Colombo, Colonel Anthony C Nelson symbolically handed over those equipment to Commander Western Naval Area, Rear Admiral Suresh De Silva who represented the Navy.

The equipment were granted as part of a Defence Building Partner Capacity Programme, coordinated by the U.S. Embassy in Sri Lanka. The items will be utilized by the Special Boat Squadron of the Navy, during Visit Board Search & Seizure (VBSS) operations.

A group of representatives from the U.S. Embassy, Director Naval Special Forces, Captain Thusitha Daminda, and senior officers from the Navy Headquarters were also present on this occasion.

Sri Lanka Original Narrative Summary: 01/04

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Sri Lanka Original Narrative Summary: 01/04
  1. Sri Lanka’s flagship tea company Dilmah Tea’s CEO Dilhan Fernando threatens to pull its products out from Australian supermarkets: wants major Australian retail chains to pay more for its handcrafted brands of Ceylon teas and cease demands for discounts: also says the company has been losing money in Australia for more than a decade.
  2. CB Governor Nandalal Weerasinghe and Treasury Secretary Mahinda Siriwardana say Treasury Bills held by the CB will be considered for “debt treatment”: also affirm that a “voluntary domestic debt optimization” operation “without coercion” is envisaged for Treasury Bonds: previously, Governor Weerasinghe had assured there would not be any local currency debt restructuring.
  3. LKR depreciates for the 6th consecutive day: loses a further Rs.0.60 against the USD from Rs.335.41 on 30.03.23 to 336.01 on 31.03.23: depreciation of 2.25% recorded in the 6-day period.
  4. Consumer prices jump 2.5% in March 2023, though 12-month inflation eases slightly to 50.3% from 50.6% a month earlier: re-based CCPI increases from 189.5 pints to 195.0 points, partly driven by the large power tariff hike: CB’s TB holdings (money printing) increases by a staggering Rs.995 billion upto 15th March 2023, under the watch of Governor Nandalal Weerasinghe.
  5. Former Elections Commission Chairman Mahinda Deshapriya says the postponement of the LG election is a crime which affects the country’s democracy: says the postponement should not be justified under any circumstances.
  6. National Christian Fellowship condemns the doctrine of local “Prophet” Jerome Fernando: states dubious prophets, miracle workers, faith healers and prosperity gospel preachers are exploiting innocent believers.
  7. Foreign Employment Bureau suspends women who have left overseas without registering with the Bureau from being admitted to “Suraksha” safe houses operated at SL embassies in the Middle East: decision to be effective from 1st April 2023.
  8. Cabinet spokesman, SLPP Economic Guru & Minister Dr Bandula Gunawardena says Sri Lanka has cheated the IMF on 16 occasions over the years by not acting in accordance with the conditions agreed upon.
  9. Hector Kobbekaduwa Agricultural Training and Research Institute study reveals the food consumption patterns of citizens have been devastatingly impacted by the on-going economic crisis: states domestic demand for “Kohila” has surged by 45% as citizens are forced to eat whatever vegetable they could find.
  10. Minister of Sports requests a discussion with the International Cricket Council on social media reports that the ICC has appointed a 3-member committee to investigate political infringements in the administration of Sri Lanka Cricket.

Sri Lankan delegation participates in ADB-WHO Study Tour to the Philippines

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Sri Lankan delegation participates in ADB-WHO Study Tour to the Philippines

A Sri Lankan delegation undertook a working visit to the Philippines from 22 to 24 March 2023, to participate in a study tour co-organized by the Asian Development Bank (ADB) and World Health Organization (WHO).

The delegation comprised Minister of Health Dr. Keheliya Rambukwella, State Minister of Finance of Sri Lanka Shehan Semasinghe, State Minister of Health Seetha Arambepola, Member of Parliament Madura Vithanage; Member of Parliament Dr. Gayashan Nawananda, Director General of Health Services Dr. Asela Gunawardena and Executive Director, Institute of Policy Studies Dr. Dushni Weerakoon.

ADB conducted sessions on the best practices of health system of the Philippines, the Universal Health Care Act of the Philippines and the delegation attended discussion on the Philippine Health Insurance Corporation PhilHealth’s engagement with the private sector.

Minister Rambukwella also had fruitful discussions with the Vice President of ADB Shixin Chen who assured the ADB’s commitment to the development of livelihood of vulnerable communities in Sri Lanka. State Minister of Finance, State Minister of Health, Director General of Health Services and the Charge d’Affaires a.i., of the Embassy of Sri Lanka in the Philippines attended the meeting.

On the sidelines, the Health Minister met with the Officer-in-Charge of the Philippines’ Department of Health Dr. Maria Rosario S. Vergeire and discussed the Memorandum of Understanding on Health Cooperation and future collaborations with Sri Lanka in promoting healthier and safer spaces through the creation of policies and laws.

Embassy of Sri Lanka

Manila

High Commissioner Moragoda meets with the Governor of Maharashtra

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High Commissioner Moragoda meets with the Governor of Maharashtra

Sri Lanka’s High Commissioner to India Milinda Moragoda who is on an official visit to the State of Maharashtra met with the Governor of the State Shri Ramesh Bais   on 30 in Mumbai. The meeting was held at the Raj Bhavan, the official residence of the Governor.

Governor Bais extended a warm welcome to High Commissioner Moragoda. The discussion that followed included a range of issues pertaining to Indo-Lanka relations, in particular the ways and means to enhance cooperation between Sri Lanka and the State of Maharashtra.

High Commissioner Moragoda apprised the Governor of the current developments in Sri Lanka. They also discussed the opportunities for the expansion of trade and investment relations as well as cultural ties between Sri Lanka and Maharashtra. The Sri Lankan High Commissioner highlighted the key role that tourist arrivals from India, including from Maharashtra, could play in the economic revival in Sri Lanka, tourism being a major pillar of economic recovery along with investments from India. In this context, developing and promoting the Buddhist trail and the Ramayana trail between Sri Lanka and the State of Maharashtra were discussed.

Sri Lanka’s Consul General in Mumbai Dr. Valsan Vethody was also present at the meeting.

A member of the Bhartiya Janata Party and a former Union Minister, Shri Ramesh Bais had previously served as the Governor of the States of Jharkhand and Tripura.

High Commissioner Moragoda’s official visit to Maharashtra comes as part of his continuing efforts to reach out to the states of India with a view to expanding Sri Lanka’s footprint at state level and promoting greater interactions between Sri Lanka and the states of the Indian Union.

High Commission of Sri Lanka

New Delhi

31 March 2023

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