July 23, Colombo (LNW): Sri Lanka’s inflation rate increased to 2.4 per cent in June, up from 1.6 per cent in May, as per the national consumer price index, leading to higher spending on transport, alcoholic beverages, and tobacco.
Inflation in the transport sector rose from 6.9 per cent to 7.5 per cent, while the hotel and restaurant sector saw a decrease from 4.9 per cent to 4.3 per cent.
In the category of alcoholic beverages and tobacco, inflation climbed from 26.6 per cent to 27.1 per cent.
Food inflation jumped from 0.5 per cent in May to 1.9 per cent in June, while non-food inflation increased from 2.4 per cent to 2.7 per cent.
However, the costs of water, electricity, and gas declined during this period.
July 23, Colombo (LNW): The passing of the 22nd Amendment to the Constitution in Parliament appears unlikely, as it is poised to be denied the required two-thirds majority for the ruling party, political sources disclosed.
The bill has been published in the gazette and, following a seven-day period, can be added to the Order Paper for its First Reading upon a Minister’s request, as per Article 78 of the Constitution and Standing Order No. 50(1).
The Second Reading is scheduled fourteen days after the First Reading, but if a petition is filed with the Supreme Court under Article 121, the bill will only proceed after the Court’s decision, legal experts pointed out.
The amendment aims to correct an inconsistency in Article 83(b) of the Constitution by changing the presidential term reference from six years to five years, aligning with the current term length.
Legal experts assert that this bill requires not only a two-thirds parliamentary majority but also approval through a referendum.
Opposition parties are mobilising to block the bill. Ilankai Tamil Arasu Kachchi (ITAK) MP M.A. Sumanthiran has called for opposition members to walk out if the bill is put to a vote, arguing that it unnecessarily confuses the electorate and could complicate the presidential election process.
He also stressed the need for a referendum if the bill passes in Parliament and expressed concern over potential scheduling conflicts with the presidential election.
Samagi Jana Balawegaya (SJB) General Secretary MP Ranjith Madduma Bandara stated that the party would discuss its stance on the bill later.
Meanwhile, Election Commission Chairman R.M.A.L. Rathnayake assured that the bill would not affect the presidential elections, confirming that the elections will proceed as scheduled and that a gazette notification calling for the elections will be issued this week.
July 23, Colombo (LNW): Dr. Ranga Jayakody, an award-winning marketer and philanthropist, has urged the government to consider reducing the public sector retirement age to enhance service efficiency, cut state costs, and manage disruptive strike actions.
Addressing the media, Dr. Jayakody highlighted that such a move would alleviate youth unemployment and counteract the ‘Brain Drain’.
He suggested that retirees could pursue other employment or business ventures, thereby benefiting both their personal finances and the national economy.
“Efficiency tends to decline past the age of 50, whether in government or private sectors,” Dr. Jayakody noted.
“We need to create opportunities for younger generations to take over these roles, ensuring robust and energetic public service delivery.”
He stressed that the infusion of young talent and enthusiasm would propel the country forward with innovative strategies and knowledge suited to the modern world.
Reducing the retirement age would also encourage young professionals to stay in the country, addressing the ‘Brain Drain’.
Dr. Jayakody also pointed out the adverse impact of public service strikes on daily life, arguing that many strikes stem from demands for higher wages or better pension benefits.
He acknowledged that while public sector salaries are generally lower than those in the private sector, the lure of a lifelong pension makes government jobs attractive.
He criticised the current retirement age of 60, stating it hampers national development and that trade unions often defend inefficiency, burdening the general public.
Jayakody proposed legal reforms to mandate retirement at age 50, which he believes would improve public sector efficiency, reduce job congestion, and better manage strike actions.
“We need to approach this issue with a calm and rational mindset,” he concluded.
July 23, Colombo (LNW): Education Minister Susil Premajayantha has committed to resolving the grievances of teacher-principal trade unions within this week.
Several trade unions have initiated a two-week work-to-rule campaign starting yesterday (22), protesting the government’s delay in addressing salary discrepancies.
Teachers and principals have declared they will only perform their regular academic duties during this period.
Ven. Ulapane Sumangala Thero, Convenor of the National Collective Against Teachers’ & Principals’ Salary Disparities, expressed opposition to union actions aimed at political agendas.
Minister Premajayantha assured that academic activities in schools would remain unaffected by the trade union action.
July 23, Colombo (LNW): During the “Abhiman-2024” event at Epitome Hotel, Kurunegala, President Ranil Wickremesinghe urged foreign employment agencies to attract tourists from countries where they place workers, promising support from the Ministry of Tourism.
At the event, President Wickremesinghe awarded certificates and gifts to agencies significantly contributing to the economy.
He reflected on his two-year presidency, noting the progress made despite the challenging economic crisis faced by Sri Lanka.
He credited the recovery to the efforts of Sri Lankans working abroad and emphasised the need for the country to become an export economy.
He highlighted the importance of training workers for better job opportunities and urged foreign employment agencies to bring business opportunities to Sri Lanka.
He encouraged innovative thinking and promised government support for initiatives like food exports to the countries where Sri Lankans are employed.
Minister of Labour and Foreign Employment, Manusha Nanayakkara, praised the President’s leadership during the economic crisis and acknowledged the significant role of foreign employment agencies in channelling USD 12 billion in foreign exchange this year.
He urged continued efforts to support the nation’s development.
The event was attended by notable figures, including Governor of the North Western Province Ahamed Nazeer Zainulabdeen, State Ministers, and leaders from foreign employment agencies.
July 23, Colombo (LNW): Several spells of showers will occur in Western and Sabaragamuwa provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts, with a few showers being expected to occur in the North-western province, the Department of Meteorology said in its daily weather forecast today (23).
Strong winds of about (50-55) kmph can be expected at times over Western slopes of the central hills and in Northern, North-central and North-western provinces and in Trincomalee, Monaragala and Hambantota districts.
Fairly strong winds about (30-40) kmph can be expected at times elsewhere of the island.
Marine Weather:
Condition of Rain:
Showers may occur at a few places in the sea areas off the coast extending from Colombo to Matara via Galle.
Winds:
Winds will be westerly to south-westerly and wind speed will be (30-40) kmph. Wind speed can increase up to 60 kmph at times in the sea areas off the coasts extending from Kankasanthurai to Puttalam via Mannar and from Hambantota to Pottuvil. Wind speed can increase up to 50 kmph at times in the sea areas off the coasts extending from Trincomalee to Kankasanthurai via Mullaittivu.
State of Sea:
The sea areas off the coasts extending from Kankasanthurai to Puttalam via Mannar and from Hambantota to Pottuvil can be rough or very rough at times. The sea areas off the coasts extending from Trincomalee to Kankasanthurai via Mullaittivu can be fairly rough at times. Naval and fishing communities are requested to be attentive in this regard.
July 22, Colombo (LNW): Opposition Leader Sajith Premadasa has called for an urgent, comprehensive national strategy to tackle the critical issue of child poverty in Sri Lanka.
At an event at Mahagama Sekara Maha Vidyalaya, Premadasa revealed that 25 per cent of the nation’s children suffer from poverty, with 42 per cent facing multidimensional poverty, as per international data.
Premadasa stressed the urgency of the situation, advocating for the creation of a Presidential Task Force focused on eliminating child poverty.
The Opposition Leader proposed that this initiative be implemented through District Secretariats in all 25 districts to ensure effective local-level action.
Criticising the government’s lack of a plan to address the crisis, Premadasa highlighted the detrimental effects of child poverty, describing it as a relentless cycle.
He further explained that poverty hinders children’s education, resulting in poor academic performance, unemployment, and perpetuated poverty.
July 22, Colombo (LNW): Sri Lanka’s banking system saw a significant improvement in its net foreign assets (NFA) in May 2024. Official data showed the combined NFA of commercial banks and the central bank reached approximately $311 million, recovering from a negative $178 million in April. This turnaround is largely attributed to the current interest rate structure and domestic credit adjustments.
The NFA improvement comprises a positive $1.9 billion in foreign assets held by overseas banking units and a negative $811 million position, resulting in a net positive $1.13 billion for banks.
However, the central bank’s position remained negative at about $821 million, though this was a substantial improvement from a negative $4.5 billion during the peak of the previous currency crisis.
The central bank and commercial banks have accumulated reserves or repaid debts amounting to $6.7 billion since a significant interest rate hike in April 2022.
This movement contributed to a surplus in the external current account due to financial outflows for reserve collection and debt repayment. Specifically, the central bank gathered or repaid $3.45 billion, while other banks accounted for $3.2 billion.
Analysts caution that flexible inflation targeting may lead to external imbalances if private credit recovers and money is printed to lower rates. This approach could undermine the natural economic laws recognized by classical economists, potentially triggering currency crises.
Sri Lanka’s central bank encountered a negative NFA position starting in August 2021, spending borrowed dollars to cover imports and loan repayments while printing money to maintain low policy rates. This practice led to currency crises characterized by a cycle of credit expansion, dollar losses, and further monetary injections.
To stabilize and build foreign assets, the central bank needs to sell its domestic assets and purchase dollars from banks at appropriate interest rates, thereby moderating domestic credit. Modern practices by IMF-prone central banks often involve swaps to mis-target rates beyond their reserves.
The central bank’s negative reserve position peaked at around $4.5 billion in the third quarter of 2022, exacerbated by credits from the Reserve Bank of India. Borrowings from the IMF also contributed to this negative position, a result of repeated currency crises driven by money printing for rate cuts and growth targeting.
The external sector began to stabilize once credits from the Asian Clearing Union (ACU) ceased. The central bank has since been paying down the ACU credits steadily under the current interest rate structure. Notably, the use of a swap with the People’s Bank of China was restricted when gross reserves fell below three months of imports.
Sri Lanka’s private and state banks also faced negative foreign assets for years due to lending to the government via US dollar Sri Lanka Development Bonds and other credits, partially financed by foreign credit lines.
Following downgrades and worsening forex shortages, banks struggled to renew these credit lines, leading to the repayment of Sri Lanka Development Bonds in rupees and a shift of dollars to foreign accounts, ultimately improving the NFA position.
July 22, Colombo (LNW): Romania is set to regulate foreign employment opportunities for Sri Lankans as it had opened 100,000 foreign jobs earlier in the year.
Sri Lanka and Rumania foreign ministers identified key areas for bilateral cooperation, including ports, shipping, logistics, cyber security, education, ICT, anti-corruption initiatives, disaster risk reduction, and civil protection.
They emphasized the importance of regulating foreign employment opportunities for Sri Lankans in Romania, discussing avenues for establishing a government-to-government mechanism for sending semi-skilled and skilled workers to Romania
Foreign Minister Ali Sabry concluded an official visit to Romania from July 15–18, 2024, at the invitation of Romania’s Foreign Minister, Luminiţa Odobescu. Their bilateral talks marked a significant milestone in the longstanding relations between the two countries and aimed to further enhance the partnership, particularly in the context of Romania’s EU membership.
Minister Sabry highlighted Sri Lanka’s recent developments, focusing on economic stabilization and growth, and the progress made in ongoing reconciliation efforts. Foreign Minister Odobescu discussed Romania’s development drive and the potential for mutually beneficial engagement with third countries.
In the global context, they exchanged views on regional and multilateral issues such as climate change, energy security, and reforms to the international financial architecture. The Sri Lankan delegation included Ambassador Madurika Joseph Weninger, Director General Europe of the Ministry of Foreign Affairs Shobini Gunasekera, and other ministry and embassy officials.
Separately, Labour and Foreign Employment Minister Manusha Nanayakkara met with Romanian Ambassador to Sri Lanka Dr. Victor Chiujdea to discuss new employment opportunities in Romania for Sri Lankans some times back.
They had an extensive discussion on the provision of employment opportunities, with the Romanian Ambassador noting that Romania had opened 100,000 foreign jobs earlier in the year.
The Ambassador stated that the Romanian government would not directly intervene in providing these opportunities, which would be managed by private employment agencies. He mentioned that Romania had opened jobs in the construction, IT, and tourism sectors.
Minister Nanayakkara requested the Romanian Ambassador’s assistance in securing more employment opportunities for Sri Lankans, particularly in education.
They discussed the possibility of collaborating with the Romanian Employment Agencies Association to facilitate these opportunities.
The Minister also emphasized the need to regulate fees charged for sending workers to Romanian jobs and assured that strict legal action would be taken against groups trafficking workers under false pretenses.
Currently, about 2,500 Sri Lankan workers are employed in Romania. Discussions are underway to appoint a permanent consul to support these workers, as stated by Minister Nanayakkara.
July 22, Colombo (LNW): The United States is enhancing Sri Lanka’s readiness for climate-related emergencies. Through the United States Agency for International Development’s (USAID) Bureau for Humanitarian Assistance (BHA), the US government provided essential equipment to the Disaster Management Centre (DMC) via the United Nations World Food Programme (WFP).
This donation, part of a larger $2.5 million USAID-funded WFP project, aims to support Sri Lanka’s efforts in improving disaster risk management.
The equipment includes submersible water pumps, kitchen sets, chainsaws, polysack bags, and tarpaulins.
It was handed over by Dustin Shiau, USAID BHA’s Regional Humanitarian Advisor for South and Central Asia, to Major General (Retired) Udaya Herath, Director General of the DMC, with officials from the Sri Lankan government and WFP present.
“Saving lives, protecting property, and minimizing the impact of disasters is central to U.S. humanitarian efforts in Sri Lanka and globally.
The United States, through USAID, collaborates with Sri Lanka’s disaster management authorities to enhance their disaster preparedness and mitigation efforts,” said Shiau.
“Our support reflects American values and the strong partnership between the United States and Sri Lanka, ensuring essential assistance reaches the most vulnerable during emergencies.”
Abdur Rahim Siddiqui, WFP Sri Lanka’s Representative and Country Director, emphasized the importance of preparedness in saving lives and livelihoods and preventing hazards from becoming disasters.
“As climate change intensifies, our focus is on mitigating its impacts to protect people’s access to food and nutrition. We appreciate the ongoing support from the United States in strengthening Sri Lanka’s climate shock preparedness,” he said.
Recent flooding from the South-west monsoon affected 20 of Sri Lanka’s 25 districts. A joint rapid assessment led by WFP and the Government of Sri Lanka identified the needs of affected communities and highlighted government priorities for response efforts.
The prepositioning of emergency supplies is one of several U.S.-funded initiatives to help Sri Lanka quickly assist communities during climate-induced disasters.
The United States is one of WFP’s largest global donors. Through USAID, WFP has supported Sri Lanka in emergencies and helped rebuild fragile food systems and improve access to better nutrition.
