By: Staff Writer

March 30, Colombo (LNW): Sri Lanka has presented a strong case for investments in its capital markets, urging global investors to participate in the nation’s economic resurgence. Having navigated through recent crises, the country is now positioning itself as an appealing investment destination with promising opportunities.

At the ‘Invest Sri Lanka’ forum held in Colombo, senior officials from key regulatory institutions underscored why this is the ideal time to enter the market. This was the first domestic event of its kind since 2014, with the inaugural forum taking place in 1998.

The event attracted over 100 international delegates and 400 local participants, offering firsthand insights into Sri Lanka’s economic progress since the 2022 crisis, its current standing, and future prospects.

Colombo Stock Exchange (CSE) Chairman Dilshan Wirasekara opened the forum, highlighting the resilience Sri Lanka has demonstrated over the past few years. He noted that despite political instability, the Easter bombings, the COVID-19 pandemic, and the economic crisis, Sri Lanka has managed a significant turnaround.

He emphasized that the country is now at a pivotal moment, presenting an unprecedented opportunity for investors.

Securities and Exchange Commission (SEC) Chairman Professor Hareendra Dissabandara echoed these sentiments, advocating for a new growth strategy that fosters long-term economic stability through market transformation.

He pointed out that Sri Lanka’s recent economic performance has exceeded expectations, highlighting the need for policy consistency and a robust macroeconomic framework to ensure sustainable growth.

“While past recoveries have lacked longevity, this time is different. We have implemented a sound regulatory and macroeconomic policy framework with solid foundations,” he remarked.

Central Bank Governor Dr. Nandalal Weerasinghe reinforced the significance of predictability and price stability, which were previously absent but are now firmly established. Reflecting on the economic crisis, he acknowledged the difficulty of the journey but expressed confidence in the country’s newfound stability.

“We have undergone a tough cycle but have successfully restored stability. The lessons learned will guide us in maintaining a strong and secure financial environment,” Dr. Weerasinghe assured.

The Invest Sri Lanka forum also facilitated regional collaboration by bringing together representatives from Pakistan, Bangladesh, the Maldives, and Nepal. A Memorandum of Understanding (MoU) was signed among the five markets, signifying a collective commitment to enhancing capital market growth and deepening cooperation.

While recognizing India as the dominant regional market, the CSE emphasized that these frontier markets have the potential to collaborate and leverage their strengths to drive mutual growth. With a stable economic foundation and strategic partnerships, Sri Lanka is poised to become an attractive investment hub in the region.

By: Staff Writer

March 30, Colombo (LNW): Sri Lanka and Thailand successfully concluded the 6th round of bilateral political consultations on March 25 at the Ministry of Foreign Affairs in Bangkok. The meeting was co-chaired by Sri Lanka’s Secretary of Foreign Affairs, Foreign Employment, and Tourism, Aruni Ranaraja, alongside Thailand’s Permanent Secretary for Foreign Affairs, Eksiri Pintaruchi.

Both delegations shared updates on key national developments, with Sri Lanka highlighting the “Clean Sri Lanka” initiative introduced by the President, along with advancements in digital infrastructure and the digital economy. The meeting provided an important platform to review existing bilateral relations, explore new areas of cooperation, and identify ways to strengthen ties.

Discussions covered a wide range of areas, including political, economic, defense, cultural, and tourism-related collaborations. Secretary Ranaraja emphasized Sri Lanka’s favorable environment for Thai investments, underscoring the increasing economic partnership between the two nations.

Both sides explored opportunities to enhance trade and investment, focusing on the Sri Lanka–Thailand Free Trade Agreement (FTA) and priority sectors such as infrastructure, agro-industry, fisheries, gems and jewelry, tourism, small and medium enterprises (SMEs), financial services, packaging, and ICT.

Regional and global issues of mutual interest were also addressed, with both nations reaffirming their commitment to collaboration through frameworks such as IORA, BIMSTEC, ASEAN, RCEP, and ACD. Secretary Ranaraja congratulated Thailand on its leadership in hosting the upcoming BIMSTEC Summit in April 2025 and its associated events, including the BIMSTEC Young GEN Forum.

The year 2024 marks the 70th anniversary of diplomatic relations between Sri Lanka and Thailand. To commemorate this milestone, both countries plan to organize a series of knowledge-sharing seminars and events, including a logo competition and a commemorative post-box design initiative. The winners of the logo competition were recognized in an award ceremony held alongside the consultations.

Key outcomes of the discussions included agreements to revive the Cultural Memorandum of Understanding (MoU) and sign a Tourism Cooperation MoU. The next round of Bilateral Political Consultations will be hosted by Sri Lanka at a mutually agreed date.

The Thai delegation included senior officials from the Ministry of Foreign Affairs, while the Sri Lankan delegation comprised Ambassador Wijayanthi Edirisinghe, Director (South East Asia and Central Asia) Thilini Ihalage, Acting Director of Commerce Chandima Kiriwandala, and other diplomatic representatives.

On the sidelines of the consultations, Secretary Ranaraja met with Thailand’s Vice Minister of Foreign Affairs, Dr. Lalivan Karnchanachari, to discuss ways to enhance cultural diplomacy and deepen historical ties rooted in Theravāda Buddhism.

The 6th Round of Bilateral Political Consultations reinforced the enduring partnership between Sri Lanka and Thailand, reaffirming their commitment to strengthening diplomatic, economic, and cultural cooperation.

By: Staff Writer

March 30, Colombo (LNW): Julie Kozack, Director of the Communications Department at the IMF said that reforms in Sri Lanka are bearing fruit.

Sri Lanka ran a current account deficit in the last quarter of 2024, and reserves were run down to repay debt, official data shows, after large volumes of money were printed to push down interbank rates by a few basis points in the period.

Sri Lanka’s imports surged in December 2024 in particular, after three months of excess liquidity from being injected to bring to the middle of a policy corridor or single policy rate

“The economic recovery is gaining momentum. Inflation remains low in Sri Lanka, revenue collection on the fiscal side is improving, and international reserves are continuing to accumulate. Economic growth reached 5 percent in 2024, and that was after two years of economic contraction. And we do expect the recovery to continue in 2025 in Sri Lanka.

These are all very positive developments for Sri Lanka and for the people of Sri Lanka,” she said at a media briefing in Washington.

Kozack said that the economy still does remain vulnerable, and therefore it is critical that the reform momentum be sustained to ensure that macroeconomic stability and debt sustainability are durably achieved.

On February 28th, the IMF Executive Board approved the Third Review under the EFF (Extended Fund Facility) arrangement for Sri Lanka. And this provided the country with immediate access to $334 million of support.

Once the Board approved that Third Review, the $334 million was made available to Sri Lanka to support its economic policies and reforms. And with this $334 million, it brings total financial support from the IMF to Sri Lanka to $1.34 billion

Sri Lanka ran a current account deficit in the last quarter of 2024, and reserves were run down to repay debt, official data shows, after large volumes of money were printed to push down interbank rates by a few basis points in the period.

Sri Lanka’s imports surged in December 2024 in particular, after three months of excess liquidity from being injected to bring to the middle of a policy corridor or single policy rate.

The liquidity was injected to push down interbank rates and undermine a scarce reserve regime as economic activities recovered.

The current account is a man-made accounting identity, which is a mirror image of the financial account in balance of payments accounting.

In the absence of money printing, any financial account inflows, invested domestically, also leads to imports, automatically triggering a deficit in the current account by increasing the availability of dollars from outside current inflow.

Reserve collecting central banks can run balance of payments deficits when printed money turns into credit and imports.

 Countries can also be forced to repay debt by fresh borrowings or run down reserves including for imports themselves when interest rates incompatible with the BoP are maintained by ‘rate cuts’ enforced with inflationary open market operations.

By: Staff Writer

March 30, Colombo (LNW): A recent audit report by the National Audit Office (NAO) has raised concerns over a major telecommunications company’s decision to write off Rs. 77.71 million in telecommunication tax dues as bad debts. 

This development has sparked criticism regarding financial transparency and tax collection practices within the Telecommunications Regulatory Commission (TRC).

The sum in question comprises taxes collected from three private companies under the prominent telecommunications firm, originally intended for remittance to the TRC. 

The breakdown of the amounts written off includes Rs. 35.77 million, Rs. 30 million, and Rs. 11.93 million. However, the company has informed both the Treasury and the TRC that the total will not be settled, as it has been classified as bad debts.

The NAO has criticized the failure to record this amount as a telecommunication tax receivable in financial statements, citing Section 3 of Part I of the Telecommunication Levy Act No. 21 of 2011. 

The audit office has urged immediate measures to recover the outstanding tax, emphasizing the serious implications of allowing such write-offs.

In response, the TRC management explained that the amount was omitted from financial statements because an explanation letter was not received before the preparation of the 2023 accounts. 

Consequently, despite a letter from the Competition Division to the Treasury, the sum was not included as a receivable. Additionally, as of December 31, 2023, trade debtors owed Rs. 372.76 million.

The audit report also reveals long-standing outstanding balances, including Rs. 15.10 million owed since 1976. 

Furthermore, Rs. 174.80 million (46% of total debts) has been owed by another private company since 1993, while Rs. 145.25 million (40% of total debts) remains unpaid by the Sri Lanka Broadcasting Corporation since 1976. 

The NAO attributes this issue to the absence of a structured system for recovering overdue frequency income.

The fiscal report released on February 17 indicates that as of October 2024, the Telecommunication Levy (TL) has achieved 73.3% of its annual revenue target, collecting Rs. 13.6 billion out of a projected Rs. 18.5 billion. 

This shortfall highlights concerns about the efficiency of revenue collection. Compared to the same period in 2023, TL revenue has declined by 9.8%. In contrast, other tax revenues have increased by 34.6% to Rs. 106.4 billion, mainly due to higher cess charges and import-related taxes.

Despite these findings, TRC Director General Air Vice Marshal Bandula Herath stated he was unaware of the tax issue cited in the NAO report. 

Furthermore, he confirmed that the matter had not been discussed at the TRC Board level, raising further questions about oversight and accountability in the sector.