SRI LANKA UPDATE | 10 – 16 NOVEMBER 2023
The Economy:
Budget 2024 – President Ranil Wickremesinghe in his capacity as Minister of Finance presented Budget 2024 in Parliament on Monday 13th November. He emphasised that the budget’s goal is to serve as a flexible framework for the future rather than set out a collective of inflexible forecasts. He stressed that the Budget has a pragmatic outlook, acknowledging the need for change influenced by externalities. He also stated that challenges in implementation are prevalent but emphasised the necessity of making difficult yet unpopular decisions for the greater good.
Fitch Ratings says goals outlined in Sri Lanka’s budget for 2024 difficult to achieve. The Rating Agency made these observations stating that although the country’s economy is expected to continue improving, even after excluding bank recapitalisation expenses, new data reveals that the fiscal deficit in 2024 is expected to be greater than the current estimate of 7.1 per cent of GDP. The revenue/GDP ratio hence would be lower than anticipated.
Concessionary loan scheme for Small and Medium Enterprises (SMEs) – President Wickremesinghe unveiled a favourable credit programme designed to encourage SMEs. According to a recent poll, about 20 per cent of these businesses have either temporarily or permanently shuttered, and the survey also showed that performance volume of the currently operating companies had decreased. With the assistance of the Asian Development Bank (ADB), President Wickremesinghe unveiled a concessionary loan programme worth around LKR 30 billion.
Sri Lanka will achieve 1.2 million tourist arrivals milestone – With a substantial spike in cruise arrivals earlier this month, Sri Lanka is poised to welcome 1.2 million tourists. 55,491 arrivals were in the first 12 days of November, bringing the total to an astounding 1.18 million. According to data, the daily average has also climbed from 3,523 to 4,624 tourists, and the earnings during the first ten months of this year amount to USD 1.59 billion, with a growth of 56 per cent from the same period in 2022.
Politics & Policy:
Sri Lanka and Sweden hold first bilateral political discussions – The first round of virtual bilateral political meetings between Sweden and Sri Lanka were held, founded on seeking new opportunities for more collaboration as well as strengthening the alliance. The primary topics of discussion included expanding bilateral economic collaboration and reinforcing the bilateral partnerships in ICT, science and technology, climate change and environment.
Government makes Tax Number mandatory for several transactions – Budget 2024 mandates the e Taxpayer Identification Number (TIN) for a number of transactions including registration or renewal of vehicles, licenses, land, title deeds and building plan approval.
Delegation from Viet Nam visits Sri Lanka to elevate bilateral ties – A high-profile delegation of 35 will visit Sri Lanka in November, under the direction of Party Central Committee Member Dr. Bui Van Nghiem. The purpose of the visit is to further strengthen and deepen the bilateral relations between Sri Lanka and Viet Nam in a range of areas including trade, tourism, industry, agriculture, culture, education, investment and other commercial and economic activity. A
discussion was held regarding the potential of using Sri Lanka as an outsourcing and manufacturing location to support and enhance the global supply chain and logistics to key foreign direct investments (FDIs) in Viet Nam, including Samsung, Intel, Microsoft, Hyundai, Toyota and LG. This delegation is among the biggest official group to visit Sri Lanka since the founding of diplomatic relations.
Artificial Intelligence Readiness Assessment (AIRA) for Sri Lanka launched – A commission headed by the Presidential Secretariat has been tasked to spearhead the country’s AI policy. As a participant in the aforementioned committee, the United Nations Development Programme (UNDP) Sri Lanka introduced the AI Readiness Assessment (AIRA), a significant step in developing Sri Lanka’s AI policy.
Apparel sector eyes USD 1 billion exports to India next year – Managing Director of Brandix Group reiterated the apparel industry stakeholders’ demands made in recent months that immediate action is required to enhance market access to India, especially in increasing the duty-free clothing quota. Based on the current FTA with India, currently only eight million pieces of apparel can be exported from Sri Lanka to India duty-free. He stated the importance of seeking opportunities that will enable Sri Lanka’s apparel industry to export at least USD 1 billion to the Indian domestic market next year.
South Korea to establish manufacturing plants for world’s leading brands in Sri Lanka –
Leading international companies have indicated intentions to open manufacturing plants in Sri Lanka. This was revealed by representatives from South Korea who had a discussion with Ministry of Industries officials during a recent visit. According to the Department of Government Information (DGI), the South Korean delegation also stated that it plans to build manufacturing plants in Sri Lanka for at least 80 different industries, with the primary emphasis on the manufacture of electronic equipment and automotive replacement parts.
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