By: Staff Writer

June 13, Colombo (LNW): The Executive Board of the International Monetary Fund (IMF) completed the second review under the 48-month Extended Fund Facility (EFF) Arrangement, allowing the authorities to draw SDR 254 million (about US$336 million).

This brings the total IMF financial support disbursed so far to SDR 762 million (about US$1 billion). The Executive Board also concluded the 2024 Article IV Consultation with Sri Lanka, the Washington-based lender said in a statement.

Directors underscored that restoring fiscal sustainability requires additional revenue measures underpinning the 2025 Budget, further tax administration reforms, as well as limiting tax exemptions and making them more transparent.

They called for protecting growth‑enhancing and social spending, and for improving the social safety net. Directors welcomed the submission of the new Public Financial Management bill to Parliament, which would strengthen fiscal discipline and establish a solid fiscal framework.

 They noted that further efforts to strengthen the debt management framework are also needed. Directors welcomed the progress on achieving cost‑recovery in energy pricing, noting its criticality for containing risks from state‑owned enterprises (SOEs)

The EFF arrangement for Sri Lanka was approved by the Executive Board on March 20, 2023 in an amount of SDR 2.286 billion (395 percent of quota or about US$3 billion). The first review of the EFF was completed by the Executive Board on December 12, 2023 with disbursements of SDR 254 million (about US$337 million).

The EFF-supported program aims to restore Sri Lanka’s macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, rebuild external buffers, safeguard financial sector stability, and strengthen governance and growth potential.

The IMF said signs of economic recovery are emerging as real GDP expanded by 3 percent (y-o-y) in the second half of 2023. May 2024 inflation was 0.9 percent and gross international reserves increased to US$5.5 billion by end-April 2024.

The primary balance improved to a surplus with tax revenue increasing to 9.8 percent of GDP in 2023. Despite improvements in non‑performing loans, pockets of vulnerabilities remain in the banking sector.

The recovery remains gradual, and the medium-term growth potential hinges on appropriate policy settings. Growth is projected to recover moderately in 2024-25 given constrained bank credit and fiscal consolidation, while facing uncertainties around the debt restructuring and policy direction following the elections.

Inflation is expected to temporarily increase due to one-off factors. The current account is expected to remain positive in 2024, driven by improved tourist arrivals and remittances.

Domestic risks could arise from waning reform momentum, especially on revenue mobilization. External risks are associated with intensified regional conflicts, commodity price volatility, and a global slowdown. Slow progress in debt restructuring could widen financing gaps.

By: Staff Writer

June 13, Colombo (LNW): Central bank is set to function as the regulatory and supervisory authority of Money or value transfer service providers

A company limited by guarantee, an offshore company or an overseas company within the meaning of the Companies Act, No. 7 of 2007 is not eligible for registration under these Regulations, CB announced in a statement.

An eligible person who intends to engage in the business of an MVTS Provider should submit the duly filled prescribed application to CBSL and obtain a Certificate of Registration.

A company issued with such Certificate of Registration will be referred to as a “Registered MVTS Provider” and will be entitled to engage in the business of or function as a MVTS Provider.

Further, during this business process, transmission of money between Registered MVTS Providers and their Agents shall be by way of bank transfers.

Moreover they are required to maintain records of Agents, associates, employees engaging in MVTS related activities, and transactions including details of Transmitter, Beneficiary, Agent, the method of transfer, period of safekeeping, etc.

CBSL will function as the regulatory and supervisory authority of Registered MVTS providers. Accordingly, CBSL may carry out supervision of any Registered MVTS Provider and issue requirements on any one or more Registered MVTS Providers regarding the manner in which any aspect of their business is to be conducted.

Any potential or existing MVTS Provider that falls within these new requirements is requested to take necessary action to comply with the same on a timely basis. The above-mentioned Regulations can be accessed through

Currently, institutions providing money transfer services in Sri Lanka such as banks and non-bank financial institutions, are regulated by the Central Bank of Sri Lanka (CBSL) or other relevant authorities to ensure financial system stability.

However, some entities providing similar services operate outside the formal system, potentially disrupting the money transfer system and not being subject to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulatory framework.

To address this, the Minister of Finance, Economic Stabilization, and National Policies issued the Money or Value Transfer Service (MVTS) Providers Regulations, No. 1 of 2024 dated April 20, 2024, under the provisions of the Payment and Settlement Systems Act, No. 28 of 2005.

Accordingly, effective from June 3, 2024, these regulations require all MVTS providers to be registered and be monitored, offering unregistered or unlicensed MVTS providers the opportunity to formalize their operations and engage in the money transfer business through formal channels. 

For the purpose of these Regulations, MVTS is defined as “financial services that involve the acceptance of cash, cheques, other monetary instruments or other stores of value and the payment of a corresponding sum in cash or other forms to a beneficiary.

By: Staff Writer

June 13, Colombo (LNW): Verité Research’s annual evaluation has shed light on the state of budget proposals in Sri Lanka, revealing that 89% of the highest-value expenditure proposals from the 2023 budget lacked progress information, amounting to a total of LKR 43.8 billion out of the allocated LKR 49.3 billion.

In 2022, progress was not known on proposals that had 93% of allocated funds. Since 2017 these last two years have been the two worst in terms of information available on the highest value budget proposals.

Looked at by number rather than value of the 25 proposals, information was made available to assess the progress of 18 proposals (72%).

This is a notable improvement from 2022, which was an all-time low on information disclosure — only 29% of the proposals (7 out of 24) could be evaluated for progress based on the information provided.

 The 18 proposals with progress information available for 2023 amounted to only LKR 5.4 billion – just 11% of the total allocation.

Visibility is particularly low around budgeted social welfare payments, which received the highest allocations as budget proposals in the last two years: LKR 26.8 billion in 2022 and LKR 43 billion in 2023.  In both years the government failed to disclose information on the progress of these proposals.

This deficiency in information is also apparent from Sri Lanka’s score in the Open Budget Survey (OBS). The budget transparency score (based on availability, substance and timeliness) was 37 out of 100 in 2023, well below the global average of 45. The OBS is the world’s only independent, comparative assessment of public access to the central government budget information.

By number of proposals only 16% (4 out of 25) were fully implemented in 2023. An example of non-implementation is the budget proposal to spend LKR 500 million to improve child nutrition.

The Ministry of Finance (MoF) informed Verité Research that the Ministry of Health (MoH) was responsible for implementing this proposal.

The MoH responded to an RTI request on this proposal stating that it had submitted a proposal requesting funds from the National Budget Department of the MoF but had not received the funds. The findings are contained in the latest end-year budget promises assessment of Verité Research, which assessed progress up to 31 December 2023. The document also makes recommendations for improvement.

By: Staff Writer

June 13, Colombo (LNW): The Government revenue has increased by 44% to Rs. 916.2 billion in the first quarter, according to the Ministry of Finance.It said the increase is due to revenue-based fiscal consolidation efforts.

The sharp rise of 44% augurs well for the Government’s aggressive stance of enhancing revenue.In 2023, Government revenue as a percentage of GDP rose to 11.1% from 8.4% in 2022.

The total Government revenue including grants surpassed its historically high level of Rs. 3 trillion to Rs. 3,048 billion up by Rs. 1 trillion or 54% in 2023 from Rs. 1.97 trillion in 2022.

Tax revenue rose by 187% to Rs. 2,720 billion from Rs. 1.751 billion in 2022.Non-tax revenue rose to Rs. 328.3 billion from Rs. 228 billion.

The Ministry of Finance attributed several factors to the significant improvement of Government revenue. Among them, tax policy reforms together with enhanced tax administration including reforms to broaden the tax base and improve compliance have played a pivotal role.

Income Tax demonstrated significant growth driven by substantial increases in revenue from corporate and non-corporate tax (by Rs. 608.2 billion), Advanced Personal Income Tax (APIT) (by Rs. 145.0 billion), and Withholding Tax (WHT) (by Rs. 157.9 billion).

 These increases were the result of revisions to tax rates, rationalisation of tax slabs, and reduction of tax-free thresholds with effect from 1 January 2023, and realisation of the full effect of tax policy measures in 2023.

 Further, there was a considerable increase in revenue from taxes on  goods and services, primarily due to an increase  in revenue from Value Added Tax (VAT) (by Rs. 694.5 billion) resulting from increasing the VAT rate, reduction of the VAT registration threshold,  and removing VAT exemptions on condominium housing apartments.

The revenue from the Social Security Contribution Levy (SSCL) increased to Rs. 216.2 billion in 2023, owing to the realisation of the full impact of the SSCL following its implementation on 1 October 2022.

This increase was mainly due to the rise in the tax revenue to GDP ratio by 2.5 percentage points and the non-tax revenue to GDP ratio by 0.3 percentage points.

This ratio exceeded the envisaged annual estimate of 10.1% for 2023 by 1 percentage point. At 11.1% of GDP in 2023, Government revenue has recovered to only 0.8 percentage points below the Government revenue to GDP ratio of 11.9% in 2019 prior to the tax policy changes implemented at the end of 2019.

By: Staff Writer

June 13, Colombo (LNW): Power of Play Ltd., a company utilising performing arts for advocacy – is partnering with Advocata Institute and Sahana Social Development Alliance to provide Sri Lankan youth in Galle and Matara with an innovative opportunity to increase their economic literacy and communication skills, via the performing arts of theatre and puppetry.

Mahadanamuththa and his modern golayas live in a fictional land called ‘Sasiribara Deshaya’. This land which was once flourished is now facing economic peril due to lack of overall vision cascading down to mismanagement of State resources, rampant corruption, short-sighted economic policies and lack of will to change.

Mahadanamuththa invites everyone to partake in his carnival ‘Maha Winnahi Mela 2024’ to understand the different facets of this crisis and help him restore the economic prosperity of his land.

The ‘Maha Winnahi Mela 2024’ will be held on Friday 14 June from 9 a.m. to 12noon and 3.00 p.m. to 6.00 p.m. at Municipal Council Hall, Galle. Entrance is free.

A carnival type spectacle for the senses including puppet shows, clown shows, game shows, animated films, musical shows, traditional auctions and many more attractions to creatively share knowledge on critical economic reforms needed for Sri Lanka.

It is aimed   to recover from the current crisis. Come one, come all to be entertained, delighted and ask important questions to understand our individual and collective responsibilities to create a resilient society a spokesperson of the company invited.

This project is a direct response to the disadvantages faced by youth, where traditional education systems do not foster critical thinking skills to engage meaningfully with complex socio-political issues.

Through a three-phase approach, this project will educate youth on how to inform their decisions with facts (based on verified scientific/statistical evidence), and communicate their opinions effectively using creative, non-violent communication tools to inspire open dialogue for collaborative problem-solving.

This project is funded by USAID through the Sri Lanka Engage program that supports opportunities to expand awareness, advocacy, and constructive civic engagement around important economic and governance issues related to reforms.

In April a national digital survey on economic awareness was conducted along with focus group discussions (with selected youth communities in Galle and Matara) to identify critical knowledge gaps of youth relating to the past, present, and future of the economic crisis of Sri Lanka.

The research results were used to devise a multi-disciplinary spectacle performance by Power of Play, to raise awareness on the current crisis and viable economic reforms.

June 13, Colombo (LNW): The Sri Lankan Rupee indicates further depreciation against the US Dollar today (13) in comparison to yesterday, as per leading commercial banks in the country.

At Peoples Bank, the buying price of the US Dollar has increased to Rs. 298.36 from Rs. 297.87, and the selling price to Rs. 308.47 from Rs. 307.96.

At Commercial Bank, the buying price of the US Dollar has increased to Rs. 297.58 from Rs. 297.33, and the selling price to Rs. 307.75 from Rs. 307.50.

At Sampath Bank, the buying and selling prices of the US Dollar remain unchanged at Rs. 299 and Rs. 308, respectively.