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Monday February 6th, 2023

Sri Lanka welcomes 194,000 tourists in 2021 amid rebound hopes

WARM WELCOME: Passengers of the Inaugural Vistara Flight UK182 welcomed by Kandyan Dance performance.

ECONOMYNEXT – Sri Lanka has welcomed 194,495 tourists in 2021 down from around 2.3 million in 2018 before the pandemic with 89,506 tourists arriving in December up from just 393 the previous year, data from the state tourism promotion office showed.

Sri Lanka welcomed 241,663 tourists in December 2019, and 228,000 in January and 207,000 in February 2020 when airports were shut to fight the Coronavirus pandemic.

Sri Lanka’s Finance Minister Basil Rajapaksa told reporters this week that they are targeting 2.5 million tourists in 2022.

Sri Lanka welcomed 507,311 in 2020, who came before airports closed in March due to Coronavirus.

In the first four days of January 2022 11,380 tourists had arrived in the island with 2,032 Russian visitors, Sri Lanka’s Daily Mirror newspaper quoted Tourism Minister Prasanna Ranatunga as saying.

Sri Lanka Tourism data showed from December 1-26 a total of 69,941 tourists arrived in the country, an indication that for the last five days of December 19,565 holidaymakers arrived in the country.

The largest source markets recorded for the month of December were India, Russia,
the United Kingdom, followed by Germany and Ukraine.

Although most tourists came from the European market there are concerns of a setback from the market after the resurgence of COVID-19 infections in those countries as they bring in travel restrictions.

“Even though signs of recovery were evident, the uncertainty for the travel industry is mounting again with countries already practising restrictions and border closures with the emergence of the new Omicron variant,” Sri Lanka Tourism Development Authority report said.

“It is anticipated that, increasing cases in Europe will further dampen consumer confidence which was gradually building after the devastating Delta variant.”

A total of 56,268 Indians had visited the country in 2021 out of 194,495 tourists in 2021.

Russia generated 16,894 visitors in 2021, The UK 16,646 visitors, Germany 12,442 and Ukraine 7,037.

Chinese travellers, the second largest source market for tourists in pre-COVID times remained the lowest with only 2,417 visiting the island for the whole year in 2021.

Although the concerns of the European market looms and as China remains closed for outbound travel, Sri Lanka is confident it will generate 200,000 or 100,000 tourists per month in 2022.

While the SLTDA chief Kimarli Fernando told a forum in December that they are expecting 100,000 tourist arrivals per month in 2022 and are hopeful of Indian travellers.

The island welcomed its highest number of tourists ever in 2018 with 2.3 million arrivals and it dipped to 1.9 million following the Easter Sunday bombings in 2019.

However McKinsey & Company, a business consultancy said the Sri Lanka market may take time to recover as China remains closed and the rise of COVID-19 infections in the European markets.

The consultancy predicted that Sri Lanka will return to 2019 levels by 2024 but to reach the 2018 levels may take five years. (Colombo/Jan07/2021)

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Sri Lanka to address SME tax problems at first opportunity: State Minister

ECONOMYNEXT – Problems faced by Sri Lanka’s small and medium enterprises from recent tax changes will be addressed at the first opportunity, State Minister for Finance Ranjith Siyambalapitiya said.

Business chambers had raised questions about hikes in Value Added Tax, Corporate Income Tax and the Social Security Contribution Levy (SSCL) that’s been imposed.

It should be explored on how to amend the Inland Revenue Act, Siyamabalapitiya said, adding that the future months should be considered as a period where the country is being stabilized.

Both the VAT and SSCL are effectively paid by customers, but the SSCL is a cascading tax that makes running businesses difficult.

In Sri Lanka SMEs make up a large part of the economy, accounting for 80 per cent of all businesses according to according to the island’s National Human Resources and Employment Policy.

(Colombo/ Feb 05/2023)

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Sri Lanka revenues Rs158.7bn in Jan 2023 up 51-pct

ECONOMYNEXT – Sri Lanka’s government revenues were 158.7 billion rupees in January 2023 but expenditure and debt service remained high, Cabinet spokesman Minister Bandula Gunawardana said.

In January 2022 total revenues were Rs104.5 billion according to central bank data.

Sri Lanka’s tax revenues have risen sharply amid an inflationary blow off which had boosted nominal GDP while President Ranil Wickremesinghe has also raised taxes.

Departing from a previous strategy advocated by the IMF expanding the state and not cutting expenses, called revenue based fiscal consolidation, he is attempting to do classical fiscal consolidation with spending restraint.

President Ranil Wickremesinghe has presented a note to cabinet requesting state expenditure to be controlled, Gunawardana told reporters.

State Salaries cost 87.4 billion rupees.

Pensions and income supplements (Samurdhi program) were29.5 billion rupees.

Other expenses were 10.8 billion rupees.

Capital spending was   21 billion rupees.

Debt service was 377.6 billion rupees for January which has to be done with borrowings from Treasury bills, bonds and a central bank provisional advance of 100 billion rupees, Gunawardana said.

Interest costs were not separately given. (Colombo/Feb05/2023)

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Sri Lanka’s Ceylon Tea prices down for second week

ECONOMYNEXT – Sri Lanka’s Ceylon Tea prices fell for the second week at an auction on January 31, with teas from all elevations seeing a decline, data showed.

“In retrospect, the decline in prices would be a price correction owing to the overall product quality and less interest from some key importers due to the arrival of cargo at destinations ahead of schedule,” Forbes and Walker tea brokers said.

The weekly sale average fell from 1475.79 rupees to 1465.40 rupees from a week ago, according to data from Ceylon Tea Brokers.

The tea prices are down for two weeks in a row.

High Growns

The High Grown sale average was down by 20.90 rupees to 1380.23 rupees, Ceylon Tea Brokers said.

High grown BOP and BOPF was down about 100 rupees.

“Ex-Estate offerings which totalled 0.75 M/Kg saw a slight decline in quality over the previous week” Forbes and Walker said.

OP/OPA’s in general were steady to marginally down.

Low Growns

In Low Grown Teas, FBOP 1 was down by 100 rupees and FBOP was down by 50 rupees while PEK was up by 150 rupees.

The Low Growns sale average was down by 8.55 rupees to 1547.93 rupees.

A few select Best BOP1s along with Below Best varieties maintained.

OP1                     Select Best OP1’s were steady, whilst improved/clean Below Best varieties maintained.   Others and poorer sorts were easier.

PEKOE                 Well- made PEK/PEK1s in general were steady, whilst others and poorer sorts were down.

Leafy and Semi Leafy catalogues met with fair demand,” Forbes and Walker brokers said.

“However, the Small Leaf and Premium catalogues continued to decline.

“Shippers to Iran were very selective, whilst shippers to Türkiye and Russia were fairly active.”

This week  2.2 million Kilograms of Low Growns were sold.

Medium Growns

Medium Grown BOP and BOPF fell by around 100 rupees

The Medium Growns sale average was down by 33.40 rupees to 1199.4 rupees.

“Medium CTC teas in the higher price bracket witnessed a similar trend, whilst teas at the lower end were somewhat maintained subject to quality,” Forbes and Walker brokers said.

“Improved activity from the local trade and perhaps South Africa helped to stabilize prices to some extent.”

OP/OPA grades were steady while PEKOE/PEKOE1 were firm, while some gained 50-100 rupees at times.

Well-made FBOP/FBOPF1’s were down by 50-100 rupees per kg and more at times.

(Colombo/Feb 5/2023)

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