JOINT APPAREL ASSOCIATION FORUM SRI LANKA (JAAFSL)
Sri Lanka’s economy to expand by 1.7 per cent in 2024, 2.4 per cent in 2025: World Bank
Sri Lanka’s economy is projected to shift towards positive growth with an estimated GDP growth of 1.7 per cent in 2024, following contractions of 7.8 per cent in 2022 and 3.8 per cent in 2023. The World Bank notes uncertainty in Sri Lanka’s economic outlook, attributed to debt restructuring negotiations, implementation of structural reforms, subdued credit to the private sector, and a decline in consumer price inflation, prompting the Central Bank to reduce policy rates in mid-2023. Link – https://bit.ly/3NTHIzq
Value Added Tax (VAT) relief could be expected by May
Sri Lankan Trade Union Director General anticipates potential relief from increased VAT by April-May 2024, citing gradual improvement in Government revenue.
Link – https://bit.ly/3SbfXVs
Over 60 per cent of Sri Lankan Households Report Decreased Income Amidst Economic Crisis
The Department of Census and Statistics with Ministry of Finance conducted a household survey to comprehend the impact of the economic crisis on individuals. 60.5 per cent of households report a decrease in their total monthly income, while 91.0 per cent experience a rise in monthly expenditures. Additionally, 22 per cent of households are in debt due to the economic downturn, and 7 per cent of the population altered health treatments.
Link – https://bit.ly/3vyWzJ9
The Asian Development Bank (ADB) to provide additional USD 100 million to Small and Medium Enterprises (SMEs) sector
The ADB will approve an additional USD 100 million to support SMEs in Sri Lanka in investment and working capital loans at single-digit interest rates. These funds follow a USD 100 million allocation in October 2023 for MSMEs in the agriculture, tourism, fishery and apparel sectors at 4-5 percent interest rates.
Link – https://bit.ly/3TUOtVq
⚖ Politics & Policy
Sri Lanka’s Central Bank (CBSL) considers transitioning to a single policy rate mechanism
To enhance clarity and ease implementation, the CBSL is considering transitioning Sri Lanka to a single policy rate mechanism. Currently using two interest rates, As part of its new monetary policy framework, the Central Bank also aims to maintain headline inflation at 5 per cent, allowing a 2 per centage point leeway on either side.
Link – https://bit.ly/3vwcw2G
Japan urges early signing of debt MoU between Sri Lanka and creditors
Japan, along with France and India, emphasized the early completion of the MoU between Sri Lanka and creditor nations on debt restructuring after reaching an agreement in principle last year. The statement also stressed the importance of transparency and comparability in agreements with creditors outside the Official Creditor Committee (OCC).
Link – https://bit.ly/4aPliJj
*Cabinet greenlights the Financial Commission 2024 Report for Parliament review *
In compliance with Article 154 R (7) of the Constitution, the Cabinet of Ministers approved the submission of the Financial Commission Report 2024 with approved recommendations, to Parliament. This is aimed at ensuring transparency and parliamentary oversight in the decision-making process in the allocation of resources for provincial development in 2024, promoting balanced regional development in the country.
Link – https://bit.ly/4aTEipU
Employees’ Provident Fund (EPF) embarks on diversification to boost returns
The Central Bank states that the EPF will diversify its investment portfolio, aiming to generate a higher risk-adjusted rate of return while ensuring overall fund safety. The EPF, as Sri Lanka’s largest superannuation fund, demonstrated resilient financial performance in 2023.
Link – https://bit.ly/41QVA39
⁉ What you need to know
Hayleys Fabric Head of Sustainability among ‘Asia’s Top Sustainability Superwomen’
Head of Sustainability and Sustainable Innovations at Hayleys Fabric Leonie Vaas has been recognized among Asia’s Top Sustainability Superwomen for 2022 by CSRWorks International. Acknowledging her exceptional leadership in driving the Company’s sustainable journey, Vaas, who has been the architect of its ESG Framework, plays a pivotal role in creating, implementing and monitoring sustainable practices.
Link – https://bit.ly/3OlUbMz
Her Royal Highness Princess Anne visits MAS Holdings
Princess Royal Her Royal Highness Princess Anne visited MAS Nirmana in Katunayake during her visit marking 75 years of diplomatic ties between the UK and Sri Lanka. The Royal delegation, accompanied by the British High Commissioner to Sri Lanka, toured this MAS Active’s product creation and development center showcasing the company’s apparel expertise and innovative capabilities.
Link – https://bit.ly/41RUdRw
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 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 Adfactors PR Lanka.
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