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Thursday August 18th, 2022

Sri Lankan police sergeant shoots himself dead with service weapon

ECONOMYNEXT – A sergeant attached to the Tangalle police station, in Sri Lanka’s deep south, took his own life on Friday with a service weapon outside the Tangalle Deputy Inspector General (DIG)’s office, police said.

The sergeant had been on duty covering for a police officer who had had to attend to a personal matter. The victim had been provided a firearm and other equipment related to surveillance duties.

He had shot himself with the same gun, police said.

The victim was a resident of Weeraketiya, Hambantota.

Tangalle police is investigating the incident.

“We are unaware of what happened. We’re currently waiting for the postmortem results,” the Tangalle police officer in charge (OIC) said Friday afternoon. (Colombo/Jun17/2022)

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Selling price in Sri Lanka’s apartments increase by over 47 pct: property tracker

ECONOMYNEXT – Overall selling prices of apartments in Sri Lanka increased by 45.17 percent when compared to June 2021, according LankaPropertyWeb’s housing price index.

Devaluation of the Sri Lankan rupee against the US dollar which has resulted in shortages of raw materials for construction which has in turn led to skyrocketing costs of construction and rising interest for housing loans, a report said, has prevented the construction of new houses leading to an increase in the purchase of houses and apartments.

The overall asking prices of houses in Sri Lanka had increased by 21.85 percent and prices of apartments for sale in Colombo had increased by 32.9 percent when compared to June 2021.

The Construction Industry Development Authority showed that the average price of a 50Kg cement bag sold by public and private dealers has increased by 187 percent from June 2021 to June 2022.

LankaPropertyWeb’s Development Consultancy and Research Team data showed that the top five searches for apartments for sale were from Colombo 2, Colombo 3, Colombo 5, Colombo 6 and Rajagiriya.

A resident from an apartment in Colombo 06 said, “We moved to this area due to the convenience, we spend less on transport and can go by bus, train or even walk to destinations. This was a massive save for us during the peak of the fuel crisis.”

Sri Lanka’s overall residential land price has dropped by 62.90 percent, a seasoned constructor told EconomyNext. This is because people are no longer interested in investing in lands and are less motivated to build houses because of the high rates of interest for housing and loans and there is value for money, he said.

Geethal Perera, an apartment builder in Colombo said: “Locals are not investing in assets or real estate because of the tumor in the economic conditions. However many overseas are investing because the international value for money on the rupee is favorable.”

The website also recorded a surge in search traffic from countries such as the UK, Australia, the US, Canada, and the UAE, said Tharindu Jayarathne, Head of Research at LankaPropertyWeb. (Colombo/Aug18/2022)

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Sri Lanka economy to shrink over 8-pct in 2022, inflation may peak below 70-pct: CB chief

ECONOMYNEXT – Sri Lanka’s economy is likely to contract more than 8 percent in 2022 and inflation may peak below 70 percent, central bank governor Nandalal Weerasinghe said.

“According to an earlier projection, we thought economic contraction would be 7.5 percent. And it looks like it will be a little more like that and it will probably pass 8 percent this year,” governor Weerasinghe told reporters after holding the policy rate at 15.50 percent but market rates around 25 to 30 percent.

Weerasinghe said at a discussion on Thursday August 15 that the sharper the economic contraction is, the faster the recovery will be.

“If there is a sharper negative growth this year means, we should be able to recover in next year, mainly in the second half,” he said.

Adding that uncertain factors such as changes in global prices of goods and services can affect the situation, Weerasinghe said if Sri Lanka manages to maintain normal economic conditions at current levels, sectors such as tourism will recover faster.

“Due to the decisions we took in the recent past, we see a favorable result now. Especially last time we saw a possibility of inflation rising more than 70 percent. But now we see it won’t go that high and with the electricity tariff being increased we have the hope it will come down going forward,” said Weerasinghe.

“On the other hand, our forex crisis has gotten better than the last time. We have been able to allocate forex for essential items likes petrol, diesel, and medicine due to the decisions we took. Import cost has reduced and exports have increased to a satisfactorylevel.

He said Sri Lanka is at a level of taking care of the basic needs of the country without going for short term loans.

Sri Lanka had to raise rates to stop private credit, reduce outflows and restore the credibility of a peg which was broken by two years of money printing.

As a result of high interest rates, credit growth should be decelerating. There is a purpose of having high interest rates. That is to decelerate private sector credit and reduce the growth in private sector credit, reduce monetary expansion, and then curtail the inflation, said Weersinghe.

There is a strong correction of the external sector with slowing private credit and also inflation.

Sri Lanka’s inflation grew 60.8 percent in the 12 months to July 2022, in the wake of failed float of the currency after two year of money printing, official data showed.

Governor Weerasinghe said inflation may peak around September below 70 percent before showing a downward trend.

“Inflation will be going up until September and we will see a downward trend after that. This is an assumption and no one can say how much it will be exactly.  It will certainly increase gradually to around 70 percent. But we can’t give an exact number,” he said.

“Earlier it was projected to go to around 70 percent but I do not think it will reach that level now. It will peak around 65 and it will trend down,” he said. (Colombo/Aug18/2022)

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Sri Lanka expects to wrap up staff-level agreement with IMF end-August: CBSL

ECONOMYNEXT  – Sri Lanka is expecting to wrap up a staff level agreement with the International Monetary Fund (IMF) when a team visits the country at the end of August, Central Bank Governor Nandalal Weerasinghe said.

“The IMF mission is coming to Sri Lanka by the end of the month with the intention of reaching  staff level agreement on the policy package.

“We are making good progress with the IMF mission and we’re hoping to reach staff level agreement,” Weerasinghe said at a monthly policy review meeting held on Thursday August 18.

“We have achieved our policy level targets so we hope to reach staff level agreement. This will certainly improve our situation,” he said.

At the moment, the Central Bank is in the process analysing its creditors before it reaches out to them.

“Once the staff level agreements with the IMF are concluded, the country hopes to reach out to its external creditors. Once the IMF agreements are in place, we will reach out to all our bilateral and commercial creditors,” he said.

Weerasinghe said a staff level agreement with the IMF will give the country a “clear picture on debt sustainability and debt targets for the country to  achieve in the next 10 years and an overall macro-fiscal programme.”

He said using these programmes endorsed by the IMF they will be able to reach out to the external creditors including first party commercial creditors and International Sovereign Bond (ISB) holders, the Paris club including Japan (which is a major partner of the Paris club) and non-Paris club creditors like China and India.

“All [creditors] will be officially approached and we will present our overall macro programme that has been endorsed by the IMF and also the debt targets we have to achieve going forward.

“So, with that information we will approach different groups and the process will commence from there with the assistance of France-based Lazard and Clifford Chance legal advisors as well as the other agents.”

Weerasinghe said the government is confident that debt can be made sustainable without restructuring domestic debt.

Related:

Sri Lanka debt can be made sustainable without re-structuring domestic borrowings: CB Governor

(Colombo/Aug18/2022)

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