By: Staff Writer

December 02, Colombo (LNW): Sri Lanka’s external sector continued its positive trajectory in October 2024, driven by significant current account inflows, leading to a rise in foreign reserves and the rupee’s appreciation, the Central Bank reported.

Exports saw a 24% year-on-year (YoY) increase, surpassing $1 billion, while the trade deficit narrowed, thanks to robust export performance.

The financial account of the Balance of Payments (BOP) also strengthened, supported by higher foreign inflows to the Colombo Stock Exchange (CSE) and the government securities market. By the end of October 2024, the overall balance recorded a surplus of $2.8 billion.

Merchandise trade deficit narrowed to $544 million in October 2024, down from $683 million in the same month last year. However, the cumulative trade deficit for January to October widened to $4.75 billion from $4.02 billion in 2023.

 Export earnings increased to $1.16 billion, primarily driven by industrial goods like garments and petroleum products, though there were declines in gems and machinery exports. Agricultural exports also rose, especially tea, spices, and coconut products.

Merchandise imports rose by 5.7% YoY to $1.7 billion in October 2024, mainly due to higher expenditure on consumer and investment goods, while imports of intermediate goods declined.

Consumer goods imports increased by 10.8% YoY to $291.9 million, driven by higher food and home appliance imports.

On the other hand, intermediate goods imports decreased by 0.6% YoY to $1.08 billion, mainly due to reduced fuel imports. Investment goods imports increased by 27.5% YoY, reaching $330.4 million, driven by higher machinery and equipment imports.

The terms of trade, which measure the price ratio of exports to imports, improved by 1.8% YoY, as import prices fell more than export prices.

The export volume index rose by 31.7%, while the unit value index declined by 5.3%, indicating that increased export earnings were largely due to higher volumes. Similarly, import expenditure rose due to a 13.6% increase in import volumes, despite a 6.9% fall in prices.

In the services sector, total inflows, excluding tourism, reached $320 million in October 2024, up from $308 million in 2023, with sea transport and IT services contributing the most. Services sector outflows increased to $284 million, compared to $171 million in October 2023, with overseas travel and sea transport being major contributors.

Foreign investments in government securities saw a net inflow of $39 million in October 2024, the first monthly inflow in 2024. Cumulative foreign investments in government securities recorded a net outflow of $218 million during January-October 2024. Meanwhile, the CSE saw a net inflow of $3 million in October, with a cumulative inflow of $46 million for the year.

Sri Lanka’s Gross Official Reserves (GOR) rose to $6.5 billion by the end of October 2024, up from $6 billion at the end of September, mainly due to foreign exchange purchases by the Central Bank and funds from the World Bank and Asian Development Bank. By the end of October, GOR covered 4.2 months of imports.

The Sri Lankan rupee appreciated by 11.3% against the US dollar by November 29, 2024, and strengthened against other major currencies. The Real Effective Exchange Rate (REER 24) also increased, indicating reduced external competitiveness.

By: Staff Writer

December 02, Colombo (LNW): The Ministry of Finance’s fiscal performance report highlights significant reforms undertaken by State-Owned Enterprises (SOEs) in 2024. Key initiatives include implementing cost-reflective pricing for electricity and fuel, restructuring the balance sheets of major SOEs, and enabling private sector participation in the petroleum industry.

These efforts have yielded positive results, with 52 key SOEs reporting a combined profit of Rs. 280.7 billion in the first half of 2024, a notable increase from Rs. 193.5 billion during the same period in 2023.

Consequently, the government has adopted a cautious approach to restructuring loss-making SOEs, as explained by Senior Economic Advisor to the President, Duminda Hulangamuwa.

 He emphasized the government’s commitment to allowing the private sector to spearhead economic growth while retaining control over strategic sectors critical to public interest.

In June 2024, the Electricity Act No. 36 of 2024 was enacted to enhance operational and financial autonomy within the Ceylon Electricity Board (CEB) across its generation, transmission, and distribution stages.

The Act also aims to increase efficiency, transparency, and accountability in the power sector while promoting private sector involvement.

Additionally, private firm M/s RMParks entered the downstream petroleum market in May 2024, fostering competition and improving service standards for consumers.

Reforms in the State-Owned Banks (SOBs) were also prioritized, with the Cabinet of Ministers approving measures in April 2024 to enhance governance, risk management, and oversight.

 A professional committee has been appointed to select independent directors for SOBs through a transparent process, while a specialized oversight unit is being established under the General Treasury’s Department of Public Enterprises.

The government has also taken steps to address the debt burden of SriLankan Airlines Limited (SLA), transferring Treasury-guaranteed debt amounting to USD 210 million and Rs. 31.4 billion to the government’s balance sheet.

Hulangamuwa stated that Sri Lanka needs a national airline but stressed the importance of prioritizing the country’s economic well-being.

Collections from SOE levies and dividends rose to Rs. 14.9 billion in the first six months of 2024, compared to Rs. 13.7 billion during the same period in 2023.

The government continues to carefully analyze the restructuring of SOEs to minimize their burden on the treasury while ensuring sustainable policy frameworks for economic growth.

By: Staff Writer

December 02, Colombo (LNW): The Galle Port Development project is set to accelerate, aiming to establish it as a fully-fledged tourist port with an investment of USD 175 million, according to the Sri Lanka Ports Authority (SLPA).

The project promises substantial economic benefits, driven by robust demand for real estate linked to tourism. SLPA has opened the venture to local and international investors through the Expression of Interest (EOI) and Request for Proposals (RFP) processes.

This ambitious initiative will provide opportunities not only for investors but also for the local community, acting as a catalyst for regional economic growth.

Among the significant features of the project are the construction of two offshore breakwaters, measuring 850 meters and 150 meters, respectively, to maintain calm waters in Galle Bay and the harbor.

The development also includes a 150-meter-long cruise berth with a draft of 12.5 meters to accommodate the world’s largest cruise vessels.

Additionally, a land reclamation project using dredged material from the harbor basin and access channel will expand Galle City’s land area by 40 hectares.

A state-of-the-art cruise terminal, retaining colonial architectural charm, will cater to cruise passengers, enhancing the port’s appeal as a tourism hotspot.

The SLPA highlighted that the project would create numerous direct and indirect employment opportunities, benefiting the local population significantly.

In a related development, approval has been granted to reclaim a 45-hectare area along Galle Bay, paving the way for infrastructure and real estate projects reminiscent of the Colombo Port City.

This reclaimed land will support the transformation of Galle Port into a cutting-edge tourist hub, drawing both local and international visitors.

The SLPA recently received the green light for the project following the Coastal Conservation and Coastal Resources Management Department’s (CCCRMD) approval of an Environmental Impact Assessment (EIA). The comprehensive plan includes real estate ventures, berthing facilities for passenger vessels, superyachts, and small boats, alongside provisions for water sports and recreational activities.

The final EIA report emphasizes strategies to mitigate environmental impacts during the project’s construction and operational phases.

 The proposed measures are expected to significantly reduce the adverse effects of land reclamation and related developments.

With adherence to these mitigation strategies, the Galle Port Development project is poised to unlock significant economic and tourism potential for the region while minimizing environmental risks.

 Positioned as a premier destination, this initiative is set to reshape Galle’s economic and cultural landscape.

By: Staff Writer

December 02, Colombo (LNW): Former Sri Lankan cricket legend and world-record holder Muttiah Muralitharan is stepping into the business arena with a groundbreaking investment in India.

Known for his unmatched skills as an ace spinner, Muralitharan is now expanding his entrepreneurial ventures by establishing a beverages and confectionery unit in Karnataka, India.

This bold move aims to shake up the Indian soft drink market and challenge long-established global players like Coca-Cola and PepsiCo.

A Dynamic Partnership with Mukesh Ambani

Muralitharan’s ambitious project is bolstered by his collaboration with Mukesh Ambani, chairman of Reliance Industries and one of India’s most influential billionaires.

The two visionaries have joined forces to revive Campa Cola, an iconic Indian soft drink brand that Ambani recently relaunched, signaling a major disruption in the market.

Their new enterprise, Muttiah Beverages and Confectioneries, plans to invest a whopping Rs 1,400 crore, with production expected to begin by January 2025 at a newly established facility in Badanakuppe, Chamarajanagara district, Karnataka.

Transforming the Indian Beverage Market

This partnership is expected to redefine competition in India’s beverage industry. Leveraging Muralitharan’s business acumen and Ambani’s industrial expertise, the venture will reintroduce Campa Cola products to consumers with a modern twist, positioning the brand as a formidable competitor in the market.

Major Investment and Economic Impact

Originally planned with an investment of Rs 230 crore, the project has expanded significantly, with the budget revised to Rs 1,000 crore and further increased to Rs 1,400 crore to accommodate its growing scale.

Announced by Karnataka’s Large and Medium Industries Minister MB Patil, this initiative aims to create jobs, enhance infrastructure, and boost the regional economy. A 46-acre plot of land has already been allocated for the facility, with officials addressing minor concerns to expedite the project.

A Diversified Career Path

Muttiah Muralitharan, who holds the record for the highest number of wickets in Test cricket, is now diversifying his portfolio into the food and beverage sector. This new venture reflects his strategic vision and entrepreneurial spirit, marking a significant chapter in his post-cricket career.

With its large-scale investment, strategic collaboration, and ambitious vision, this project is set to disrupt the Indian beverage market and cement Muralitharan’s legacy not only on the cricket field but also in the business world.