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Tuesday December 5th, 2023

Sri Lanka opposition econ spox has mixed feelings on president’s “difficult” budget

MP Harsha de Silva (l) with President Ranil Wickremesinghe at the tea party hosted in parliament after the president’s throne speech in 2022. Image credit: President’s Media

ECONOMYNEXT – President Ranil Wickremesinghe’s budget proposals are aimed at elections, with questions arising on their feasibility, but can also be seen as an attempt to take the economy in the right direction amid challenges, Sri Lanka opposition MP Harsha de Silva said.

“The president did this from a very difficult place; we need not be disingenuous about that. But the question is, what is the ground reality? People are struggling to live. Even if all this is correct, how do you implement it? That’s where the problem is,” de Silva said, speaking to reporters at the end of the budget presentation in parliament on Monday November 13.

The main opposition Samagi Jana Balawegaya (SJB) legislator said the budget clearly signals a coming election in 2024.

“The president has announced many things to be given, including a 10,000-rupee salary increase. But that won’t be till April; so I think there will be an election between April and October,” he said.

The MP, widely seen as the SJB’s leading voice on economic policy, acknowledged that the economy has to be reformed rigorously, requiring “very serious restructuring”.

The chains that have shackled the country must be broken, he said.

“Although the president didn’t mention it today, there is also the proposed VAT increase via gazette. Exemptions given to mechanical equipment and other things will now be removed.

SMEs won’t be able to do a thing,” said de Silva.

With the proposed 3-percent VAT hike on the hand hand, and the social security levy threshold dropping from 120 million rupees to 60, small and medium enterprises (SMEs) are going to face a tough time, he said.

“VAT is charged if it’s 80 million a year, which has also been brought down to 60. The president didn’t talk about these things.”

“This is like a plane flying in a certain direction. If there is massive turbulence, there is a chance the plane will crash. The probability of this plane crash is very high,” he said.

The MP said, however, that he understands the president’s predicament.

“I sympathise with the president [and recognise] that this is not an easy budget to do. But the heavy burden felt by the people is not being reduced,” he said.

“Will the private sector be able to get at least 10,000 rupees in salary increase?”

MP de Silva also questioned the proposed increase in the borrowing limit from 3,900 billion rupees to 7,350 billion.

“Where do we get those loans? What will happen to interest rates? I will analyse this tomorrow, but I see this as a budget aimed at an election,” he said. (Colombo/Nov13/2023)

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Sri Lanka finding ways to clear 1.1mn pending cases: Justice Minister

ECONOMYNEXT – Sri Lanka is taking a series of steps to speed up 1.1 million pending court cases and encourage alternative dispute solving mechanisms, Justice Minister Wijedasa Rajapakshe said.

“The delay in court cases is a serious problem,” Minister Rajapakshe told a briefing at the President’s Media Centre.

“We have already taken several steps to expedite cases.”

There were 5,680 cases in Supreme Court, 4,054 in the Court of Appeal, 6,168 in the High Court of Civil Appeal, 8,363 in the Commercial High Court, 28,000 in the High Court, 254,000 in District Courts and 791,000 in Magistrates Courts.

In 2015, only 49 percent of complaints to mediation boards were resolved. Following reforms, the ratio has been increased to 70 percent.

The value of disputes going to mediation board has been raised to one million rupees from 500,000 rupees.

To solve land problems in the post-war period, special mediation boards on property was set up in the North and the East.

Mediation boards on property will be set up in another 16 districts.

Commercial High Courts were increased to four from three.

Another Commercial High Court will be set up in the future. The consideration of cases that can go to a High Court was raised from 4 million rupees to 10 million rupees.

A commercial dispute resolution law will be introduced next January.

A small claims court has been established.

Case involving disputes below 2 million rupees can be directed to small claims court.

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Sri Lanka stocks close up as some investor interest returns

ECONOMYNEXT – The Colombo Stock Exchange closed up on Monday, CSE data showed.

The All Share Price Index was up 0.22 percent, or 23.33 points, at 10,743.59.

The S&P SL20 index was up 0.68 percent, or 20.60 points, at 3,067.73.

Turnover was at 708 million. The banks sector contributed 189 million, while the food, beverage and tobacco sector contributed 176 million of this.

Sri Lanka’s stock market has seen some investor interest return after last week’s news that the country had managed an agreement on a debt restructuring deal with an official creditor committee, and foreign funds for some development projects resumed.

Top positive contributors to the ASPI in the day were Sampath Bank Plc (up at 71.50), LOLC Holdings Plc (up at 379.00), and Commercial Bank of Ceylon Plc, (up at 90.90).

There was a net foreign outflow of 52 million.

Citrus Leisure Plc, which announced that its banquet hall and revolving restaurant at the Lotus Tower would launch on or around Dec 9, saw its share price rise to 6.20 rupees. (Colombo/Dec4/2023).

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Sri Lanka rupee closes broadly steady at 328.10/30 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 328.10/30 to the US dollar on Monday, from 328.00/10 on Friday, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.70/14.00 percent from 13.70/95 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.10 percent from 13.90/14.05 percent.

A bond maturing on 15.01.2027 closed at 14.00/14.10 percent from 14.05/10 percent.

A bond maturing on 01.07.2028 closed at 14.20/35 percent from 14.15/25 percent.

A bond maturing on 15.05.2030 closed at 14.25/45 percent, from 14.20/45 percent.

A bond maturing on 01.07.2032 closed at 14.05/40 percent, from 14.00/45 percent. (Colombo/Dec4/2023)

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