Sri Lanka’s economic death spiral just spinning with ever increasing domestic and foreign debt despite the government’s efforts to put the monetary and fiscal policy vehicle on track from its wilderness in the past two years.

Government’s efforts to accelerate fiscal reforms to bring back economic stability, and a stable administration on the directions of President Ranil Wickramsinghe are about to bear fruits despite sabotage attempts of interested parties.

According to Central Bank’s weekly report on economic indicators outstanding government debt increased to Rs. 2.47by end August 2022 from Rs. 1.76 trillion as at end 2021. By end August 2022, total outstanding domestic debt amounted to Rs. 1.31 trillion  while the rupee value of total outstanding foreign debt amounted to Rs. 1.7 trillion.

Broad money (M2b) expanded by 13.8 per cent, on a year-on-year basis, in October 2022. The reserve money decreased compared to the previous week mainly due to decrease in the currency in circulation.

The reserve money decreased compared to the previous week mainly due to decrease in the currency in circulation.

Net Credit to the Government from the banking system increased by Rs. 135.0 bn in October 2022. Outstanding credit to public corporations increased by Rs. 74.8 bn in October 2022.Outstanding credit extended to the private sector declined by Rs. 46.8 bn in October 2022.

Net Credit to the Government from the banking system increased by Rs. 135.0 bn in October 2022.Outstanding credit to public corporations increased by Rs. 74.8 bn in October 2022.

Outstanding credit extended to the private sector declined by Rs. 46.8 bn in October 2022The reserve money decreased compared to the previous week mainly due to decrease in the currency in circulation.

The total outstanding market liquidity was a deficit of Rs. 384.810 bn by the end of this week, compared to a deficit of Rs. 401.310 bn by the end of last week.

Weekly AWPR for the week ending 02 December 2022 decreased by 178 bps to 27.89 per cent compared to the previous week.

During the year up to 02nd December 2022, the Sri Lankan rupee depreciated against the US dollar by 44.8 per cent.

During the eight months ending August 2022, government revenue and grants increased to Rs. 1.27 trillion compared to Rs. 943.6 bn recorded in the corresponding period of 2021.

During the period from January to August 2022, total expenditure and net lending increased to Rs. 2.38 trillion compared to Rs.2.06 trillion recorded in the corresponding period of 2021.

During the eight months ending August 2022, overall budget deficit declined to Rs. 1.11 trillion compared to Rs. 11 trillion recorded in the corresponding period of 2021.

During the eight months ending August 2022, domestic financing decreased to Rs.1.16 trillion compared to Rs. 1.30 trillion in the corresponding period of 2021.

Foreign financing recorded a net repayment of Rs. 50.4 bn during the period from January to August 2022, compared to the net repayment of Rs. 183.1 bn recorded in the corresponding period of 2021.

US Secretary of State Antony Blinken yesterday (02) met with Sri Lanka’s Foreign Minister Ali Sabry at the US Department of State.

The Sri Lankan Foreign Minister extended his gratitude to the US Secretary of State for the humanitarian support, loans, grants and technical support given to Sri Lanka.

Blinken said as the two nations near 75 years of ties, the US thanks Sri Lankans for their partnership and commitment to advancing shared democratic principles.

MIAP

Despite international lending agencies and bilateral partners, especially India, extending in emergency credit, the health sector is still short of over 150 essential drugs.

“We are trying our best to maintain an optimum level of supplies, but there is a shortage,” Dr. D.R.K. Herath, Deputy Director General of the Health Ministry’s Medical Supplies Division.

Payment delays, regulatory delays, and pricing limits, according to an industry official, are compounding Sri Lanka’s medicine crisis.

A state pharmaceutical agency, according to a source, owes local suppliers Rs7 billion rupees.It was difficult for businesses to secure materials.

“If you have a heart attack today, you’re not going to get clot-dissolving drugs,” an industry official said.

If you’re bitten by a rabid dog, you’re unlikely to acquire rabies virus neutralising anti body injections, which can be fatal.

From the one billion US dollar credit line from India, 200 million USD is to purchase medical supplies, with the State Pharmaceutical Corporation (SPC) given the responsibility of placing the order.

Sri Lanka has seen medicine shortages since late June with the Central Medicine Storage running out of stocks.

The authorities said that, until stocks are restored, the ministry has implemented a central communication strategy to facilitate the exchange of medicines between medical institutes based on availability.

The health ministry has informed state hospitals to prioritise emergency cases, minimising routine surgeries in order to preserve the available stocks.

“In hospitals around the country, especially in Colombo, a significant medicine shortage can be seen. This shortage is increasing day by day,” Dr Haritha Aluthge, a member of Government Medical Officers Association (GMOA) said.“

Meanwhile, the health ministry said in a statement that constructions of a pharmaceutical production zone with private and state investment in Uyamaduwa will commence in February 2023.

The ministry said 11 out of the 20 ground slots have already been given to private sector investors.

“At present, about 20 percent of the medicines needed by the country are manufactured in the country and it should be brought to the target level of 50 percent in the next two to three years,” the statement said quoting Minister Keheliya Rambukwella.

The National Medicines Regulatory Authority (NMRA) NMRA has cleared 30 pharmaceuticals and 36 medical devices for import without registration in the last two months.

1. USAID Administrator Samantha Power says political reforms need to accompany economic reforms in Sri Lanka: meets with Foreign Minister Ali Sabry to “understand the Govt of Sri Lanka’s priorities and reforms to address the country’s economic crisis”.
   
2. Maldivian VP Faisal Naseem meets President Ranil Wickremesinghe who requests the Maldives to invest in Sri Lanka’s high-tech agriculture sector, cruise tourism and high-end tourism sectors.
   
3. Elections Commission recognizes 7 new Political Parties: United Congress Party, Dewana Parapura, Sri Lankawe Samaja Prajathanthrawadi Pakshaya, Deshapremi Eksath Jathika Pakshaya, Bahujana Wiyath Peramuna, Eros Democratic Front, and Democratic People’s Congress.
   
4. President Ranil Wickremesinghe expresses condolences on demise of former President of China Jiang Zemin: signs condolence book at the Chinese Embassy.
   
5. US-funded Centre for Policy Alternatives led by Pakiasothy Saravanamuttu says CB Governor Dr. Nandalal Weerasinghe has “emerged” as the most trusted and the only person commanding the trust of the majority of Sri Lankans “to carry out economic reforms in resolving the present economic crisis”: next in line as per CPA “survey” are – (2) Ranil Wickremasinghe, (3) Harsha Silva, (4) Ranjith Bandara, & (5) Champika Ranawaka.
   
6. Planters’ Association spokesperson Roshan Rajadurai expresses “bafflement” over statement of Minister of Plantation Industries about taking over under-utilised lands from big-scale planters: says there are no such under-utilised cultivable land.
   
7. Central Bank mid-term report shows Govt introduced 10 tax changes while amending VAT 4 times to increase revenue from 2019 to October 2022.
   
8. Meeting under the patronage of President’s Senior Adviser on National Security and Chief of Staff Sagala Ratnayake decides to release 5,000 hectares of land in Moneragala, Kotiyagala and Kebilitta areas on a temporary basis for farming, to face a food crisis in the future.
   
9. State Minister of Investment Promotion Dilum Amunugama says 123 agreements have been signed with foreign investors in 2022: 82 for reinvestment and 41 for new investment: investors include from India, Japan, Norway and Singapore.
   
10. Top Cricketer Angelo Mathews among 23 Sri Lankan cricketers registered for Indian Premier League Cricket Tournament Auction for 2023.

Sri Lanka is now moving on correct path after its organic farming and back firing chemical fertiliser ban of former President Gotabaya Rajapaksa towards averting the food crisis through its massive cultivation drive presidential secretariat sources revealed.

The initiative to encourage crop planting as part of boosting local produce has been launched, whilst promoting cultivation in state owned baron lands.

The utilisation of 5,000 hectares of land in Moneragala, Kotiyagala and Kabilitta for farming was discussed on Wednesday, as a precautionary measure for the food crisis Sri Lanka is expected to face in the future.

The discussion was held at the Presidential Secretariat under the patronage of the President’s Senior Adviser on National Security and Chief of Presidential Staff Sagala Rathnayake.

Although nearly 8,000 hectares of land in these areas were owned by the Forest Department for reforestation, it has been decided to commence afforestation activities in only 3,000 hectares of land in which saplings have already been planted.

The temporary distribution of the remaining 5,000 hectares of land amongst farmers for cultivation until the necessary facilities for reforestation were prepared was also discussed at length.

It was also focused, during the discussion on the possibilities of releasing a certain extent of land for cattle rearing on a temporary basis.

The Forest Conservation Department and Heads of other related institutions were also advised to seek counsel from the Attorney General’s Department regarding the legal issues that may arise in carrying out these activities.

Meanwhile the Government is initially planning to harvest paddy only in 248,000 hectares, but the farmers expressed confidence in the cultivation of 275,000 hectares and by the end of the Yala season a record 512,000 hectares of paddy was cultivated.

“As 512,000 hectares of was cultivated over two million tonnes of paddy would be harvested and after milling, we can get around 1.5 million tonnes of rice, enough to feed the country for over six months,” Minister Mahinda Amaraweera said.  

Last year, maize production was 90,000 tons. Farmers have worked to cultivate 111,000 hectares of maize this year,” he said.

The Minister also said the country can achieve a dry chilli yield of 4 million kilos per acre by giving priority to cultivation, adding that a program has been initiated targeting youth communities to adopt modern technology and hybrid cultivation methods at present. Minister Amaraweera also said the country is almost self-sufficient in green grams, kurakkan, cowpea, and peanut production, whilst noting that the type of peanuts imported to cultivate jumbo peanuts is now being done locally.

Showers or thundershowers will occur in Northern, Eastern and North-central provinces and in Hambanthota district, and showers or thundershowers will occur elsewhere during the afternoon or night, said the Department of Meteorology in a statement today (03).

Heavy showers above 100mm are likely at some places in Western, Sabaragamuwa and Central provinces and in Galle and Matara districts.

General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.

Marine Weather

MIAP