October 02, Colombo (LNW): Showers or thundershowers are forecasted for most parts of the island during the afternoon or night. In some areas of the Eastern, Central, and North-central provinces, fairly heavy rainfall exceeding 50 mm is anticipated.
Additionally, a few showers are expected in the coastal regions of the Southern and Western provinces during the morning.
The general public is urged to take necessary precautions to reduce the risks associated with temporary localized strong winds and lightning during thundershowers.
October 01, World (LNW): In a significant escalation of tensions in the Middle East, Iran has launched dozens of missiles at Israel, marking a major offensive.
This assault, believed to have carried out by the Islamic Revolutionary Guard Corps (IRGC), was described as retaliation for the assassination of Hamas leader Ismail Haniyeh and Hezbollah leader Hassan Nasrallah.
The missile strike targeted key Israeli bases, with Iranian officials warning of further attacks if Israel retaliates.
Israel responded swiftly, with the “Iron Dome” defence system intercepting many of the incoming missiles, particularly over central and southern Israel, although some landed, triggering large explosions.
Sirens rang out across the country, and citizens were instructed to seek shelter as emergency services were dispatched to multiple sites.
While no immediate injuries have been reported, the psychological and physical toll on Israel’s population is palpable.
The US has also become involved, with a defence official confirming that American forces are intercepting some missiles to aid Israel’s defence.
Meanwhile, images of missiles illuminating the skies above Tel Aviv, Ashkelon, and northern Israel have flooded social media, revealing the scale of the attack.
Palestinian groups in Gaza and the West Bank have been seen celebrating the assault, while Israeli citizens remain vigilant, following “life-saving” instructions sent by the home front command.
The Israel Defence Forces (IDF) have asked citizens to remain in protected spaces until further notice, stating that the missile attack is ongoing.
This unprecedented strike adds another layer of complexity to an already volatile situation in the region, as both Iran and Israel brace for what may come next.
October 01, Colombo (LNW): The Supreme Court (SC) has commenced hearings on a petition alleging a significant loss of Rs. 85 billion to the State, following a controversial decision by the previous government to grant a casino license for the Lotus Tower in Colombo. The petition, brought forward by Ven. Malgalle Sujatha Thero, claims that the government led by President Ranil Wickremesinghe issued the license at a rate far below the market value, violating new regulations.
President’s Counsel Navin Marapana, representing the petitioner, argued before the court that the government had issued a casino license to Golden Island Hospitality Ltd. for the Lotus Tower for just Rs. 500 million. This decision was made in July 2024, despite new regulations requiring a much higher investment of $250 million (approximately Rs. 75 billion) along with a Rs. 10 billion license fee. Alternatively, regulations stipulated that a license could be obtained with a $500 million investment and a Rs. 5 billion license fee. Marapana stated that by not adhering to these regulations, the government caused a substantial financial loss to the state, amounting to at least Rs. 85 billion.
The casino in question, Majestic Pride Casino, is to be operated by Golden Island Hospitality Ltd., a subsidiary of the Majestic Pride Group, which currently manages two casinos in Goa, India, and one in Kathmandu, Nepal. In August, Golden Island Hospitality Ltd. announced its partnership with the renowned Majestic Group Hotels and Casinos, one of India’s leading gaming enterprises, to establish Majestic Pride Casino in Sri Lanka.
The Finance, Economic Stabilisation, and National Policies Ministry of Sri Lanka granted the casino business license under the Casino Business (Regulation) Act No. 17 of 2010. Additionally, an agreement between Golden Island Hospitality Ltd. and the Board of Investment of Sri Lanka was signed on 1 August 2024 under Section 17(2) of the Board of Investment of Sri Lanka Law No. 4 of 1978, cementing the establishment of this new venture in Sri Lanka’s gaming and hospitality sector.
The Attorney General’s representative, Senior State Counsel, requested additional time to gather instructions and respond to the matter. The Supreme Court granted this request, allowing the respondents to file limited objections if necessary. The case has been rescheduled for further hearings on 14 October.
Appearing on behalf of the petitioner, Navin Marapana was joined by attorneys Kaushalya Molligoda and Uchitha Wickremesinghe, instructed by Sanath Wijewardane. The legal battle highlights growing concerns over potential fiscal mismanagement and irregularities in major government decisions involving large-scale investments. The outcome of this case could set a significant precedent for how such deals are scrutinized in the future.
October 01, Colombo (LNW): The Delegation of German Industry and Commerce in Sri Lanka has announced that 300 German companies have demonstrated their strong commitment to Sri Lanka’s market. On 19 September,
AHK Sri Lanka successfully organized the 10th edition of the ‘Top German Brands in Sri Lanka’ event, held at the Cinnamon Grand Hotel in Colombo.
This year’s event highlighted the robust bilateral relations between Germany and Sri Lanka by showcasing the contributions of 300 German brands. These companies are recognized for their excellence, innovation, and sustainability, significantly impacting various sectors within Sri Lanka.
A key moment of the event was the introduction of Sri Lanka’s first-ever German Brands Directory. This directory marks a decade of German business presence in Sri Lanka, highlighting the breadth and influence of these enterprises. It serves as a comprehensive resource, further solidifying the long-standing partnership between the two nations.
Dr. Felix Neumann, the Ambassador of the Federal Republic of Germany to Sri Lanka and designated to the Maldives, attended the event as the Chief Guest.
In his keynote address, Dr. Neumann stressed the long-standing relationship between the two countries, noting the unwavering commitment of German companies to Sri Lanka’s development. He remarked, “As we mark the 10th edition of Top German Brands, we not only celebrate the success of these companies but also their role in deepening bilateral relations and supporting sustainable growth.”
Since its inception in 2015, the Top German Brands event has grown in importance, offering a platform that celebrates the contributions of German businesses to Sri Lanka.
AHK Sri Lanka Chief Delegate, Marie Antonia von Schönburg, expressed her pride in the event’s progress. She highlighted that the success of German companies in Sri Lanka reflects their resilience, dedication to quality, and focus on long-term partnerships.
She acknowledged that these firms have not only established themselves firmly in the local market but have also made significant contributions to the country’s economy.
The event also recognized several German companies that have operated in Sri Lanka for many years, paying tribute to their long-standing commitment to excellence and the trust they have built. The enduring success of these firms underscores the perseverance, dedication, and courage typical of German enterprises.
The Top German Brands event continues to symbolize the strength of economic ties between Germany and Sri Lanka, promoting business growth and fostering closer relations between the two countries.
October 01, Colombo (LNW): Sri Lanka’s external sector exhibited a positive trajectory in August 2024, marked by significant inflows from workers’ remittances and increased exports, despite a dip in tourist earnings compared to the previous month, according to the Central Bank’s report. However, the merchandise trade deficit expanded year-on-year (YoY) when compared to August 2023 but showed improvement relative to July 2024.
Key Developments in the Services Sector and Workers’ Remittances
Services sector inflows, excluding tourist earnings, reached USD 327 million in August 2024, up from USD 306 million in August 2023. Workers’ remittances provided a robust boost, totaling USD 4,288 million during the period from January to August 2024, compared to USD 3,863 million in the same timeframe in 2023. This continued growth highlights the resilience of remittances as a key source of foreign exchange for the country.
Tourist Earnings Slow Down, But Still Strong Overall
Although there was a slowdown in tourist earnings in August 2024 compared to the previous month, the sector still performed well. Tourist earnings for the first eight months of 2024 amounted to USD 2,167 million, a significant rise compared to the USD 1,304 million recorded in the corresponding period in 2023. This increase reflects the recovery of the tourism industry despite short-term fluctuations.
Trade Deficit Worsens Year-on-Year
The merchandise trade deficit expanded to USD 430 million in August 2024, compared to USD 307 million in August 2023. The widening of the trade gap was driven by a substantial increase in import expenditures. However, the deficit narrowed when compared to July 2024. Cumulatively, the trade deficit from January to August 2024 reached USD 3,573 million, higher than the USD 2,964 million recorded during the same period in 2023.
Export Performance: A Bright Spot
Earnings from merchandise exports rose by 9.5% YoY to USD 1,224 million in August 2024, marking the highest monthly earnings so far in 2024. Industrial exports, particularly textiles and garments, led this growth, with textiles alone bringing in USD 512 million, the highest since August 2022. Petroleum products and rubber goods also saw significant gains. Agricultural exports were bolstered by tea and coconut-related products, although minor agricultural exports declined. Mineral exports also contributed to the positive export performance.
Import Expenditures Surge
Merchandise import expenditures grew by 16.0% YoY to USD 1,654 million in August 2024, driven by an increase in intermediate and consumer goods imports. Higher imports of textiles, wheat, and chemical products were key contributors, along with a rise in the volume of refined petroleum imports. In contrast, investment goods imports fell, particularly in machinery and equipment.
Conclusion: Mixed Trends Amid Economic Recovery
Overall, Sri Lanka’s external sector continues to recover with strong export growth and remittances, although the expanding trade deficit and volatile tourist earnings pose challenges. Despite these headwinds, the country’s foreign reserves stood at USD 6 billion at the end of August 2024, reflecting a stable external position.
October 01, Colombo (LNW): The inauguration ceremony of the Institute of Democracy and Governance (IDAG) was held yesterday (30) under the patronage of former Speaker, Sri Lankabhimanya Karu Jayasuriya.
The institution aims to foster democratic governance through community engagement initiatives, promoting transparency and encouraging active citizen participation.
By addressing key areas such as policy advocacy and reform, IDAG seeks to shape a more informed and accountable public sector.
Through its research and educational programmes, the institution will support initiatives that enhance public awareness of democratic processes, leadership responsibilities, and community development.
October 01, Colombo (LNW): Sri Lanka’s central bank has reported a 0.1% deflation in the past 12 months, largely attributed to its deflationary monetary policies and a focus on currency stability.
The Colombo Consumer Price Index (CCPI), a key indicator of inflation, has been in decline since March 2024, except for a brief rise in June due to excess liquidity from dollar purchases.
This deflation marks a significant shift from the high inflation rates that had plagued the country in recent years.
The central bank’s efforts to stabilize the currency began in March 2023, when it lifted a surrender rule that had contributed to a currency collapse during a failed float in 2022.
This move allowed the Sri Lankan rupee to appreciate, driving down prices of traded goods and food, even as service costs increased to compensate for the earlier currency depreciation.
Since then, inflation has remained low, with almost no inflation recorded for the 24 months leading up to September 2024.
Sri Lanka’s inflation challenges are often attributed to the central bank’s lack of a credible anchor, compounded by International Monetary Fund (IMF) advice that critics argue is based on faulty economic doctrines.
Despite these critiques, former State Finance Minister Shehan Semasinghe defended the previous government’s economic reforms, highlighting the significant progress in stabilizing the economy. He noted that when the government took office in 2022, inflation was as high as 70%, with food inflation peaking at 95%.
As of September 2024, Sri Lanka had achieved 0.5% deflation, a dramatic improvement from previous inflation rates. Food inflation also declined, turning to -0.3%, while non-food inflation dropped to -0.5%.
These figures, according to Semasinghe, demonstrate the effectiveness of the government’s policies in controlling inflation and stabilizing the economy.
However, despite these improvements, the foremer President Ranil Wickremesinghe administration lost power after the recent presidential election.
Marxist leader Anura Kumara Dissanayake won the presidency after campaigning against economic reforms implemented by the previous government, including high taxes and the restructuring of state-owned enterprises.
Wickremesinghe’s policies, heavily influenced by the IMF, were seen as unpopular among voters, leading to his defeat in the election. Despite this setback, Wickremesinghe’s coalition, including Semasinghe, is looking to make a comeback in the upcoming November general elections.
Sri Lanka’s economy had been in turmoil since its default in 2022, a result of years of flawed monetary policies aimed at output targeting and flexible inflation targeting without a clean float.
Despite the central bank’s efforts, analysts warn that the current IMF-supported framework could be problematic if inflationary policies resume when private credit recovers. Critics also point to the central bank’s plan to operate a single policy rate, which they believe could harm the poor and lead to further currency crises. In the 24 months leading to September 2024, the central bank has managed to keep inflation at just 0.84%, according to the CCPI. However, analysts remain cautious, warning that the economy could collapse if inflationary policies return.
October 01, Colombo (LNW): Former MP Dhammika Perera has been reinstated as the Co-Chairperson and a non-executive director of Hayleys PLC, one of the most prominent business conglomerates in Sri Lanka.
The appointment takes place from today (01).
The Colombo Stock Exchange (CSE) has been informed of Perera’s appointment by Chairman and Chief Executive Officer (CEO) of Hayleys Mohan Pandit.
Mr. Perera previously served as the Co-Chairperson and a non-executive director of Hayleys, and stepped down from his position in order to serve as a member of Parliament.
October 01, Colombo (LNW): The Sri Lankan Rupee (LKR) has appreciated further against the US Dollar today (01) in comparison to yesterday (30), as per the official exchange rates released by the Central Bank of Sri Lanka (CBSL).
Accordingly, the buying price of the US Dollar has dropped to to Rs. 292 from Rs. 293.50, and the selling price to Rs. 301.05 from Rs. 302.56.
The Sri Lankan Rupee also appreciated against other foreign currencies, including Gulf currencies.
October 01, Colombo (LNW): Sri Lanka’s export performance in August 2024 saw notable growth, with merchandise exports rising by 4.18 per cent year-on-year, reaching $1,165.4 million, according to provisional data from Sri Lanka Customs.
This increase was driven by key sectors such as apparel, textiles, tea, rubber-based products, coconut products, and spices. The strong performance was complemented by a 3.1 per cent rise compared to July 2024, showcasing consistent upward momentum.
In addition to merchandise, the services sector performed strongly, with estimated export earnings for August reaching $318.77 million, a 6.49 per cent increase from the same period in 2023.
Overall, combined merchandise and services exports for August 2024 totalled $1,483.13 million, reflecting a 4.67 per cent growth from the previous year.
Tea exports played a crucial role, contributing 12 per cent of merchandise exports. Earnings from tea increased by 9.11 per cent year-on-year to $130.54 million, bolstered by strong sales of bulk tea and tea packets, with notable market growth in Iraq and Iran, where exports surged by 13.35 per cent and 114.41 per cent, respectively.
Rubber and rubber-finished products saw significant growth, with a 29.48 per cent year-on-year increase, bringing in $103.79 million in August.
Coconut-based products also showed remarkable performance, with export earnings rising by 38.3 per cent.
Additionally, activated carbon, derived from coconut shells, saw an impressive 27.93 per cent increase, generating $13.74 million.
Spices and concentrates continued their steady climb, growing by 8.55 per cent in August, with pepper exports experiencing a substantial 31.56 per cent surge.
The country’s ICT sector also saw a considerable boost, with export earnings estimated to have risen by 35.76% to $146.26 million.
For the first eight months of 2024, cumulative merchandise exports increased by 5.37 per cent to $8,440.02 million. Services exports for the same period are expected to have grown by 7.58 per cent to $2,246.77 million, bringing the total combined exports to $10,686.79 million, a 5.82 per cent rise compared to 2023.
The growth in key export sectors has been consistent throughout 2024. Apparel exports rose by 1.28 per cent, tea by 8.26 per cent, rubber products by 11.52 per cent, coconut products by 20.85 per cent, and spices by 3.56 per cent in the first eight months of the year.
Meanwhile, ICT exports are expected to have grown by 17.04 per cent during this period.
However, not all sectors witnessed positive trends. Earnings from electrical and electronic components (EEC) decreased by 16.42 per cent to $282.37 million, reflecting challenges within this sector.
Sri Lanka’s major export markets, including the US, UK, India, Germany, and China, showed positive growth. Exports to India rose by 4.57 per cent in August, driven by higher shipments of pepper and animal feed.
Exports to India and Pakistan collectively accounted for 8.4 per cent of total merchandise exports during this period, highlighting the region’s growing importance to Sri Lanka’s trade landscape.
