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Friday December 9th, 2022

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 shares fall on profit taking after nine sessions

ECONOMYNEXT – Sri Lanka shares slipped on Friday after gaining for nine straight sessions reverting from its highest gain in more than seven weeks on profit taking, brokers said.

“Bourse regressed to red ending the 9-day winning streak as investors resorted to book profits in blue chip counters,” First Capital Market Research said in it’s daily note.

The main All Share Price Index (ASPI) closed 0.54 percent or 47.84 points lower at 8,843.90.

The market witnessed a turnover of 1.6 billion rupees, lower than this year’s daily average turnover of 2.9 billion rupees.

The market saw a net foreign inflow of 1 million rupees. The total net foreign inflow stood at 22 billion rupees so far for this year.

The Paris Club group of creditor nations has proposed a 10-year debt moratorium on Sri Lankan debt and 15 years of debt restructuring as a formula to resolve the island nation’s prevailing currency crisis.

The government is in discussions with Asian Development Bank (ADB) and World Bank to get loans of 1.9 billion US dollars after a reform program with the International Monetary Fund is approved.

A policy loan now being discussed with the World Bank may bring around 700 million US dollars, Coomaraswamy told a business forum organized by CT CLSA Securities, a Colombo-based brokerage.

The Asian Development Bank may also give around 1.2 billion US dollars most of which will be budget support, he said.

In the last few sessions, market gained after the Central bank governor said interest rates should eventually ease despite the fears of a domestic debt restructuring as inflation falls, increased liquidity in dollar markets, and the inter-bank liquidity improves.

The more liquid index S&P SL20 closed 0.59 percent or 16.77 points lower at 2,827.72.

So far in December ASPI gained 2.2 percent.

The ASPI gained 0.5 percent in November after losing 13.4 percent in October.

It has lost 27.6 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

John Keells Holdings pulled the index down to close at 1.5 percent lower at 147 rupees.

Aitken Spence lost 2.0 percent to close at 141 rupees and Commercial Bank closed 1.4 percent down at 50.50 rupees a share. (Colombo/Dec09/2022)

 

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Sri Lanka bond yields end higher, kerb dollar Rs370/371

ECONOMYNEXT – Sri Lanka bonds yields ended up and the T-bills eased on active trade on Friday, dealers said.

The US dollar was 370/371 rupees in the kerb.

“The bond rates went up, however more interest was seen in the short term bills by the investors” dealers said.

A bond maturing on 01.05.2024 closed at 31.90/32.20 percent on Friday, up from 31.25/70 percent at Thursday’s close.

A bond maturing on 15.05.2026 closed at 30.30/31.30 percent steady from 30.30/31.00 percent.

The three-month T-bills closed at 30.75/31.30 percent, down from 32.00/32.25 percent.

The Central Bank’s guidance peg for interbank transactions was at 363.18 rupees against the US dollar unchanged.

Commercial banks offered dollars for telegraphic transfers between 371.78 and 372.00 for small transactions, data showed.

Buying rates are between 361.78 – 362.00 rupees. (Colombo/Dec 09/2022)

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Foreign minister, US ambassador discuss future assistance to crisis-hit Sri Lanka

ECONOMYNEXT — In a meeting in Colombo, Sri Lanka Foreign Minister Ali Sabry and US Ambassador to Sri Lanka Julie Chung discussed ways in which the United States can continue to support Sri Lanka going forward, the Ambassador said.

Chung tweeted Friday December 09 afternoon that the two officials had reflected on the “twists and turns” of 2022, at the meeting.

Minister Sabry was recently in Washington D.C. where he US Secretary of State Antony Blinken.

A foreign ministry statement said the two officials held productive discussions at the Department of State on December 02 on further elevating bilateral relations in diverse spheres, including the 75th anniversary of diplomatic relations which will be marked in 2023.

Incidentally, Sri Lanka also celebrates the 75th anniversary of its independence from the British in 2023, and President Ranil Wickremesinghe has given himself and all parties that represent parliament a deadline to find a permanent solution to Sri Lanka’s decades-long ethnic issue.

The US has been vocal about Sri Lanka addressing concerns about its human rights record since the end of the civil war in 2009 and was a sponsor of the latest resolution on Sri Lanka passed by the United Nations Human Rights Council. Unlike previous resolutions, this year’s iteration makes specific reference to the country’s prevailing currency crisis and calls for investigations on corruption allegations.

In the lead up to the UNHRC sessions in Geneva, Minister Sabry Sri Lanka’s government under then new president Wickremesinghe does not want any confrontation with any international partner but will oppose any anti-constitutional move forced upon the country.

On the eve of the sessions on October 06, Sabry said countries such as the United States and the United Kingdom, who led the UNHRC core group on Sri Lanka, are greatly influenced by domestic-level lobbying by pressure groups from the Sri Lankan Tamil diaspora.

These pronouncements notwithstanding, the Wickremesnghe government has been making inroads to the West as well as India and Japan, eager to obtain their assistance in seeing Sri Lanka through the ongoing crisis.

The island nation has entered into a preliminary agreement with the International Monetary Fund (IMF) for an extended fund facility of 2.9 billion dollars to be disbursed over a period of four years, subject to a successful debt restructure programme and structural reforms.

Much depends on whether or not China agrees to restructure Sri Lanka’s 7.4 billion dollar outstanding debt to the emerging superpower. Beijing’s apparent hesitance to go for a swift restructure prompted Tamil National Alliance MP Shanakiyan Rasamanickam to warn of possible “go home, China” protests in Colombo, similar to the wave of protests that forced the exit of former pro-China President Gotabaya Rajapaksa.

The TNA will be a key player in upcoming talks with the Wickremesinghe government on a solution to Sri Lanka’s ethnic issue. (Colombo/Dec09/2022)

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