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Thursday May 23rd, 2024

Sri Lanka to grow 1.9-pct in 2024 despite tax hikes: ADB

ECONOMYNEXT – Sri Lanka is expected to grow 1.9 percent in 2024, and speed up to 2.5 percent in 2025, as the island recovers from a contraction last year, the Asian Development Bank said.

Sri Lanka’s currency collapsed in 2022 after two years of aggressive macro-economic policy where money was printed to boost growth and taxes were also cut, throwing large section of the population into poverty and pushing up inflation.

“In Sri Lanka, growth will rebound to 1.9 percent in 2024 and 2.5 percent in 2025 from the 2.3 percent contraction in 2023,” the ADB said in its Asian Development Outlook report.

“This will be driven by rising output in services, resumption in industrial projects, and continuous reform aimed at improving the business climate.

“Still, tax increases will dampen the recovery in private consumption and investment.”

Sri Lanka’s central bank restored monetary stability by September 2022 and the economy started to show positive growth officially from the third quarter of 2023. In the fourth quarter the economy was estimated to have grown 4.5 percent.

Sri Lanka has a history of recovering from severe monetary shocks and the island has one of the worst central banks in the region, along with Pakistan, analysts have said.

In addition to the usual currency crises generated by the central bank which does not have a credible single anchor monetary regime, Sri Lanka also defaulted on its external debt and was also faced by capital flight from banks.

Both Sri Lanka’s and Pakistan rupee is derived from the Indian currency at 4.70 to the US dollar at independence.

Pakistan’s growth for the year to June 2024, will also recover to 1.9 percent, and 2.8 percent in 2025, the Asian Development Bank said from a contraction last year.

Sri Lanka’s rupee fell to 360 to the US dollar and has been allowed to appreciate to 298 amid deflationary open market operations (sell-downs of domestic assets of the central bank against dollar purchase), which is making traded commodities cheaper and boosting disposable incomes.

The central bank also has to collect foreign reserves under an IMF program, which requires dampening domestic investments, at least by an equal amount. However countries with monetary stability generally attract foreign capital while also preserving the real value of domestic savings.

The ADB has been funding Sri Lanka after an IMF deal was struck.

Sri Lanka is expected to wrap up re-structuring debt by June 2025, which will also open bilateral lending taps. (Colombo/Apr12/2024)

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Sri Lanka has power breakdowns amidst extreme weather

ECONOMYNEXT – The state-owned power utility, the Ceylon Electricity Board has reported over 36,900 breakdowns resulting in power interruptions to more than 300,000 consumers in the last three days due to inclement weather in the island, the power minister said.

“Additional service staff has been assigned to attend the breakdowns and the CEB management & service staff are working 24 hours to restore power to the affected consumers,” Minister of Power and Energy, Kanchana Wijesekera said on social media platform X (twitter).

Wijesekera said consumers could report power interruptions through the CEB hotline 1987, via SMS to 1987 with BD and the electricity consumer number to follow, or use the CEB Care app, or through http://cebcare.ceb.lk.

The South-East monsoon has seen floods, landslides and strong winds do damage to the utility provider’s infrastructure in the last week. (Colombo/May23?2024)

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Sri Lanka President calls for unity, sacrificing for a better tomorrow on Vesak day

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe has recalled a sermon from the Buddha about sacrificing for a better tomorrow, and called for unity to heal and rebuild the country, as Buddhists celebrate Vesak.

Buddhists celebrate Vesak as commemorating the birth, enlightenment and passing away of the Buddha.

“At this challenging moment, we as a nation should cultivate the same great zeal for enlightenment that Buddha exemplified, inspired by his sermon, “Maththasukha parichchaga- passé che vipulan sukhan” – to sacrifice today for a better tomorrow,” President Wickremesinghe said in his Vesak day message.

“We must remember the advice of Lord Buddha, “Sabbattha Sammanaso,” to treat everyone equally and ensure we put it into practice as a country. This is the greatest offering we can present to the Buddha on this Vesak day.

“Regardless of race, religion, caste, or political affiliation, we must all unite to heal and rebuild our country. ”

The full statement is reproduced below:

The Vesak festival is a profoundly sacred day for Buddhists worldwide, commemorating the Buddha’s birth, enlightenment, and passing. Buddhists in Sri Lanka, along with their brethren around the globe, celebrate Vesak with deep devotion. They spend this period engaging in religious observances and venerating the Buddha with fervent devotion.

At this challenging moment, we as a nation should cultivate the same great zeal for enlightenment that Buddha exemplified, inspired by his sermon, “Maththasukha parichchaga- passé che vipulan sukhan” – to sacrifice today for a better tomorrow.

We must remember the advice of Lord Buddha, “Sabbattha Sammanaso,” to treat everyone equally and ensure we put it into practice as a country. This is the greatest offering we can present to the Buddha on this Vesak day. Regardless of race, religion, caste, or political affiliation, we must all unite to heal and rebuild our country. The principles of Lichchavi Raja Dharmaya will guide us in this endeavour.

Let us keep in mind that the primary aim of the Vesak festival is to foster spiritual growth and character development in a world rapidly advancing physically. I wish everyone a blessed Vesak festival.

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Sri Lanka to host foreign artistes, Sigiriya fashion show to promote tourism

ECONOMYNEXT- Sri Lanka plans to bring down international artistes, and hold water festivals to boost tourists, Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu said.

“We will be hosting a few international artists in September to December,” Gajabahu told EconomyNext.

“We would also be having a fashion show in Sigiriya.”

Sri Lanka is targeting 2.3 million tourists in the year 2024 with expectations that it may go up to 2.5 million Gajabahu said.

Sri Lanka is also planning on having a water festival in coastal towns such as Trincomalee, Arugambay  and Kalpitiya in order to showcase Sri Lanka’s capacity for watersports, Gajabahu said. (Colombo/May22/2024)

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