SRI LANKA UPDATE | 04 – 10 AUGUST 2023
The Economy:
Cabinet gives nod for bold economic reforms to drive stability and growth – The Cabinet of Ministers gave its decisive assent to a number of reform initiatives intended to boost economic growth and maintain long-term stability, paving the way for a strong and stable economic future. In this regard, President Ranil Wickremesinghe in his capacity as Minister of Finance, Economic Stabilization and National Policies provided a thorough outline of important areas that need quick attention. A wide range of important topics were discussed, including state finance policy, financial stability, initiatives for the energy industry, the external economy, debt restructuring and foreign funding.
Government expenditure up by 47 per cent, revenue by 38 per cent from January to May; Budget deficit tops LKR 1 trillion mark – In the first five months of 2023, Sri Lanka’s budget deficit exceeded LKR 1 trillion while spending growth outpaced revenue growth. According to the most recent information provided by the Central Bank of Sri Lanka (CBSL), Government revenue and grants from January to May increased by 38 per cent to LKR 1.12 trillion from LKR 812.7 billion during the same time last year. Total spending and net loans surged by 47 per cent, from LKR 1.45 trillion a year ago to KR 2.13 trillion in 2023,. The overall budget deficit that resulted increased to LKR 1.01 trillion from LKR 636.7 billion in the first five months of last year.
Sri Lanka’s official reserve assets increase marginally in July 2023 – CBSL reports that Sri Lanka’s official Reserve Assets climbed to USD 3,762 million in July 2023 from USD 3,724 million in June 2023. The People’s Bank of China swap facility of USD 1.4 billion which is subject to usage requirements is included in the present official reserve assets.
Tourist arrivals in 2023 cross 800,000 mark – Sri Lanka’s tourist arrivals crossed 800,000 until August this year. A total of 30,303 tourists arrived in Sri Lanka over the first six days of August, enhancing its appeal as a preferred tourism destination. India remained at the top with 4,608 visitors contributing the most to this increase in tourist arrivals in the first six days, closely followed by the United Kingdom, China, France, Germany, Italy, Netherlands, Spain, Australia and Russia.
Politics & Policy:
Sri Lanka’s Transport Ministry to introduce electric buses in 2048 – In accordance with President Ranil Wickremesinghe’s vision for the future, the Ministry of Transport is making major efforts to increase overall efficiency and streamline Sri Lanka’s public passenger transport system. The Ministry is also taking steps to integrate electric buses into Sri Lanka’s fleet of public transportation by 2048 aligned with global sustainability goals and in an effort to update the country’s public passenger transportation system.
Asian Palm Oil Association (APOA) says palm oil cultivation can unlock Sri Lanka’s economic potential – Significant attention has been given to Sri Lanka’s recent move to either temporarily ban or restrict the cultivation of palm oil both domestically and internationally. At present, local consumption stands at 264,000 metric tons, with only 20 per cent produced domestically. Palm oil is a crucial component in numerous consumer products. According to the APOA, palm cultivation in Sri Lanka presents an exceptional, win-win opportunity to strengthen the economy,
reduce imports, improve food security and support sustainable development goals. The APOA reaffirmed that Sri Lanka can maximise the potential of palm oil as a crucial contributor to the economy, while protecting its natural resources and ecosystems via strategic planning, collaboration, and sustainable practices.
Iran and Sri Lanka highlight the importance of enhancing banking and trade ties – Governor of the Central Bank of Iran (CBI) and the Minister of Foreign Affairs of Sri Lanka discussed bilateral economic relations during a meeting in Tehran. The two countries emphasized the importance of developing monetary and banking relations between the two nations as a necessary first step. In reference to the Asian Clearing Union’s (ACU) significant contribution to the growth of trade ties between the two nations, the Governor opined that the ACU is a very suitable platform for the development of trade and monetary relations between the two countries and can also be used to settle payments.
Sri Lanka to launch Climate Justice Forum at COP 28 – According to Sri Lanka’s Minister of Environment, Sri Lanka will introduce the Climate Justice Forum (CJF) for vulnerable and developing nations at the next 2023 UN Climate Change Conference’s 28th Conference of the Parties (COP 28). The Minister stated that Sri Lanka had proposed the creation of a CJF with the shared goal of ensuring greater climate justice, accelerating the financing of losses and damages and offering an alternative and non-traditional approach. The Forum will give governments, multilateral organizations and other stakeholders a platform to discuss and rank environmental challenges in the Asia Pacific area.
Disclaimer – This advisory is intended for circulation among JAAF stakeholders only. Please do not circulate or share on social media.
This Advisory, written for our partners interested in developments in Sri Lanka against the backdrop of the current crisis, is an update on the one issued last week. This document summaries developments covering significant political and economic events. The Advisory includes economic, political, social and governance perspectives. It draws on news reports, analyses, Government announcements and documents, and from other sources that we may be in contact with or have access to.
This Advisory was prepared by the Strategic Communications Unit of Adfactors PR Lanka. For inquiries, contact pumudika.amarasekara@adfactorspr.com