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Tuesday January 31st, 2023

Sri Lanka looks for more economic links with Greater Mekong region

WORLD HERITAGE: Ha Long Bay is a top tourist destination in Vietnam. With most of the economy back to normal, tourism is one of the sectors that is beginning to recover.

ECONOMYNEXT- Sri Lanka is looking for stronger links with the Mekong region, with bilateral trade already on a growth path officials have said as the country faces the worst currency crisis in the history of its intermediate regime central bank.

“We are facing an economic crisis in Sri Lanka resulting shortage of basic requirements like food, medicine, gas,” S.M.D. Suriyakumara, Sri Lanka – Greater Mekong Business Council of the Ceylon Chamber of Commerce has said at the council’s 11th Annual General Meeting.

“Many Sri Lankans are getting used to changing their lifestyle and finding new ways of living and earning.

“As a council, if we can bring contributions through investments, and opportunities encouraging
tourism, that is what as a Council we can do at this moment since it is what the country needs.”

“Sri Lanka’s rupee fell from 182 to 360 to the US dollar after the central bank printed money for two years to suppress interest after a tax cut in a bid to close an output gap (stimulus) but blew the balance of payments apart and triggered a default on sovereign debt.

The Greater Mekong Chambers deals with East Asian countries.

Sri Lanka had imported from Myanmar 2.3 million dollars and exported 7.5 million dollars, Suriyakumar said.

From Thailand, Sri Lanka has imported 397 million US dollars and exported 51.6 million US dollars.

From Cambodia, Sri Lanka has imported 2.84 million dollars and exported 3.14 million dollars.

From Vietnam, it has imported 62.88 million dollars and exported 397 million dollars.

From Laos, we have imported 1.43 million dollars and exported 0.14 million dollars worth of goods.

“We must try to narrow down that gap in exports and imports. That’s what the solution we can contribute as a Council,” Suriyakumar had said.

Suriyakimar was addressing the 11 annual general meeting of the chamber attended by the Ambassador of Vietnam Ho Thi Thanh Truc, and Minister Counselor of Royal Thai Embassy in Sri Lanka Arthit Prasartkul

Vietnam Ambassador Truc said Sri Lanka and her country were both at a location which had attracted the attention of world power and was advocating private sector empowerment.

“In terms of trade and investment, Vietnam and Sri Lanka have many similarities that create a favourable
environment for business people of both countries,” she said.

“Because of our strategic locations in each region, both countries have attracted the attention of the
world’s major powers.

Both governments, on the other hand, advocate for private sector empowerment and a public-private partnership model for mutual development.

Sri Lanka has also signed bilateral investment treaties with 28 countries and double taxation treaties with 38 countries, including Vietnam”.(Colombo/Sept18/2022)

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Sri Lanka shares down for 2nd day as tax hike, delay in Chinese debt assurance weigh

ECONOMYNEXT – Sri Lanka’s shares edged down on Tuesday as worries over delay in financial assurances from China which is mandatory for a $2.9 billion dollar IMF loan and rise in protests against tax hike kept investors in check, analysts said.

The main All Share Price Index (ASPI) edged down by 0.28 percent or 24.62 points to 8,865.05. It fell for the second session after hitting more than three-month high.

“The market is looking for more macro cues because of faster Chinese debt assurance was expected. The market is also hit by fall in corporate earnings due to high taxes,” an analyst said.

China has given an initial response on debt re-structuring to Sri Lanka though analysts familiar with the process say it is not a ‘hard assurance’ sufficient for the IMF program to go through.

The International Monetary Fund is working with China on extending maturities of Chinese loans to defaulted countries like Sri Lanka, as there is resistance to hair-cuts, Managing Director Kristalina Georgieva told reporters on January 14.
The earnings for first quarter are expected to be negative for many corporates with higher taxes and rising costs. However, investors had not expected earnings to be low in the December quarter because of year end pick ups on heavy counters, the analyst said.
Earnings in the second quarter of 2023 are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

However, the central bank said the IMF deal is likely in the first quarter or in the first month of the second quarter.

The most liquid index S&P SL20 dropped by 0.64 percent or 17.74 points to 2,764.51 points.

The central bank has said it could cut interest rates in future when the country sees fall in inflation, which has already started decelerating.

The market saw a turnover of 1.7 billion rupees, slightly lower than the month’s daily average of 1.8 billion rupees and while being significantly lower than 2022’s daily average turnover of 2.9 billion rupees.

The bourse saw a net foreign inflow (NFI) of 93 million rupees extending the net offshore buying to 413 million rupees so far this year.

Top losers were LOLC, Royal Ceramics Limited and Hayleys. (Colombo/Jan31/2023)

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Sri Lanka exports fall in December as global recession weighs

ECONOMYNEXT – Sri Lanka’s merchandise exports earnings fell 9.7 percent in December year-on-year as the island nation saw a drop in buying from its key export destinations which are facing a looming recession after the Russia-Ukraine war.

The earnings from the merchandise exports recorded $1.04 billion  in December 2022 compared to the same month in the previous year as per the data released by the Sri Lanka Customs.

“This was mainly due to the decrease in export earnings from Apparel & Textiles, Tea, Rubber based Products, and Coconut based Products, Food & Beverages, Spices & Essential Oils and Fisheries products,” the Export Development Board (EDB) said in a statement.

“The reason for this decline was due to the ongoing recession in major markets due to rising cost of production, energy etc. Imports declined sharply due to inflation and demand for goods and services are reduced.”

However, Sri Lanka saw a record export earning of $13.1 billion in 2022 due to increased demand in the key exports throughout the year

Earnings from all major product sectors except Electrical & Electronic components as well as Diamonds, Gems & Jewellery fell in December.

Exports of Apparel & Textiles decreased by 9.6 percent to $480.3 million in December 2022.  Export earnings from Tea fell by 3 percent to $107.3 million, Rubber and Rubber Finished products dropped 20.3 percent to $74.5 million,

However, export earnings from the Electrical & Electronics Components increased by 16.18 percent to $42.9 million in December 2022, while Diamond, Gems & Jewelry jumped 35.7 percent to $30.8 million. (Colombo/Jan31/2023)

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Sri Lanka records over 6,000 dengue cases in first three weeks of January

ECONOMYNEXT – Sri Lanka recorded over than 6,000 dengue cases in the first three weeks of January 2023 after a spell of heavy monsoon rain though a drop in cases is likely from February, officials said.

Health officials identified 6,204 dengue patients by January 22, up from 5,793 recorded in the corresponding period last year.

“A rise in cases can be observed in the November-January period with the heavy rain due to the northeast monsoon,” an official from the National Dengue Control Unit told EconomyNext.

Of all reported cases, 46.3 percent were from the Western Province, official reports showed.

Akuressa, Batticaloa, Eravur, Trincomalee, Madampe, Badulla, Eheliyagoda, Kegalle, Kalmunai North and Alayadivembu MOH areas were identified as high-risk areas for dengue during the third week of January by the health officials.

“We are expecting a decline in dengue cases soon. The Western province is always in the top position with the highest number of dengue cases. Apart from that, we are seeing a higher number of cases during this period in areas like Puttalam, Jaffna districts. A certain number of cases have also been recorded in the Kandy district,” the official said.

“Usually the cases peak in December, but they decline by February. This year, too, we are facing this scenario. There is an increase of dengue during the months of November, December and January”.

Due to the economic situation in the country, the Public Health Inspectors (PHIs) in an earlier report said, diesel and pesticides are not being provided by the ministry.

However, rejecting the allegation, the official from the NDCU said the government has provided enough funds for get the necessary pesticides but it is being used according to a scientific method to avoid building a resistance in the dengue mosquito.

“The recommendation is to do the fogging if there is a dengue outbreak or if there are few patients reported from the same locality.

“If you use this pesticide haphazardly, the mosquitos will develop resistance against it,” the official said, adding that there are adequate stocks of the chemical available. (Colombo/ Jan 31/2023)

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