Central Bank shifts focus to medium-term inflation strategy 

The Economy 

The Central Bank announced a strategic shift in focus on inflation from near-term to medium-term, aiming to address transmission lag in policy decisions. This adjustment seeks to provide more predictive guidance, enhance policy coordination and anchor expectations. 


More than 50 loss-making State-Owned Enterprises (SEOs) turn profitable 

52 loss-making State Owned Enterprises which had combined loss of LKR 743 billion in 2022 have been transformed into profitable ventures. The combined profit in the first nine months of 2023 is LKR 313 billion. This turnaround is attributed to new management techniques and focused initiatives, aided by measures such as implementing a price mechanism and economic reforms. 


Bank of America recommends Sri Lanka Bonds after restructuring proposal 

Bank of America has upgraded its recommendation for the purchase of Sri Lanka dollar bonds following the Government’s submission of a new restructuring proposal to dollar bondholders. The estimated the fair value of the country’s external debt (EXD) ranges from USD 51 billion to USD 56 billion based on expected recovery value at 12-14 per cent exit yield. 


⚖ Politics & Policy 

Government to draft State Finance Management Act 

The Government has begun drafting the State Finance Management Act subsequent to Cabinet approval. The Act aims to enhance financial processes and discipline across government agencies and includes a new framework of financial rules developed under the guidance of a supervisory committee chaired by representatives from budget departments. 


Sri Lanka and Iran to pursue bilateral ties on economic and political cooperation 

The Iranian Foreign Minister expressed optimism about expanding bilateral ties, including political, economic and tourism cooperation during a visit to Colombo. He appreciated Sri Lanka’s support for Palestine and emphasized cooperation in scientific and technological fields. 

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LKR 20 billion loan lifeline approved for Micro, Small and Medium Enterprises (MSMEs) 

President Ranil Wickremesinghe’s proposal for a credit scheme to revive the MSME sector was approved by the Cabinet of Ministers. The scheme supported by ADB aims to assist struggling entrepreneurs in various sectors including manufacturing, import, export, tourism and apparel. 


⁉ What you need to know 

Sri Lanka Apparel introduces traceability initiative at Tex360 

In a revolutionary collaboration, Sri Lanka’s apparel manufacturers partnered the Asian Development Bank (ADB), International Financial Reporting Standards (IFRS) and the Global Language of Business (GS1) to pioneer a singular QR code affixed to each clothing item in a new era of transparency, traceability, and accountability. The QR code unveils details about the brand, supply chain, product specifications, materials utilized, care instructions, compliance information, recycling guidelines, and comprehensive tracking and tracing of the entire supply chain. 


Adani Green Energy (Sri Lanka) obtains energy permit 

Adani Green Energy (Sri Lanka) Limited has obtained the Energy Permit from the Sri Lanka Sustainable Energy Authority for its USD 355 million, 234 megawatt Pooneryn Wind Energy Power Project in the Northern Province. This will be Sri Lanka’s largest single-location wind energy project and addresses critical energy, economic, and environmental concerns. 


Sri Lanka Shippers Council raises alarm over soaring freight rates 

The Sri Lanka Shippers’ Council (SLSC) has expressed concern over the significant increase in freight rates by shipping lines navigating the Cape of Good Hope en route to Europe and the United States, which has surged by 300 per cent. This spike in costs is adversely affecting the global competitiveness of Sri Lankan manufacturers and MSMEs. 


Sri Lanka Apparels welcomes the Economic Cooperation and Trade Agreement (ECTA) with India 

The Joint Apparel Association Forum (JAAF) welcomed the ECTA agreement, which promises growing demand for “Made in Sri Lanka” apparel from India’s middle class, suggesting a lucrative market opportunity. The Export Development Board acknowledged past challenges but remains hopeful of the industry’s rebound. 


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 summarises Page 3 of 3 

results 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 other sources that we may be in contact with or have access to. 

This Advisory was prepared by the Strategic Communications Unit of Adfa