The Economy 

President discusses effective progress of debt restructuring at Business Roundtable in Switzerland 

President Ranil Wickremesinghe highlighted Sri Lanka’s economic recovery during the World Economic Forum, acknowledging challenges, the constructive IMF meeting and outlining reforms, including lifting import restrictions and restoring foreign exchange liquidity. 

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International Monetary Fund (IMF) lauds Sri Lanka’s reforms and economic progress in first review 

The IMF commended Sri Lanka for progressive reforms in revenue collection, inflation reduction and boosting investor confidence. In the upcoming review, the IMF’s focus will be on new legislation for revenue increase and economic stabilization. The IMF emphasized concluding debt restructuring negotiations and implementing agreements with official creditors as crucial next steps for Sri Lanka. 

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Egypt explores expansion of trade with Sri Lanka 

The Egyptian Ambassador and Sri Lanka’s Minister for Investment Promotion discussed the promising expansion of trade between the two countries. Egypt currently ranks as the 50th country to which Sri Lanka exports products. There has been a recent uptick in Sri Lankan investments in Egypt while Egypt too is seeking expansion of tourism investments in the island’s Eastern Province. 

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⚖ Politics & Policy 

President courts investors for renewable energy sector at Davos 

President Wickremesinghe urged investors to tap into Sri Lanka’s renewable energy sector during the ‘Green Technology Forum’ in Davos. He highlighted ongoing energy reforms and emphasized the potential for green hydrogen development, aligning Sri Lanka’s commitment to achieving net zero by 2050. 

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Central Bank of Sri Lanka (CBSL) unveils reforms to boost governance regulations for State Banks 

The Finance Ministry directed State Banks, constituting 48 per cent of the banking sector’s assets, to appoint Boards of Directors with increased independent members, aligning with IMF 

recommendations for better governance. The proposed reforms will become law in early 2024 through the Banking (Amendment) Bill. 

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Parliament passes Singapore Convention Bill 

The Sri Lanka Parliament passed the Recognition and Enforcement of International Settlement Agreements Resulting from Mediation Bill, reflecting Sri Lanka’s commitment to the United Nations Convention on Settlement Agreements from arbitration. The Bill primarily focuses on standardising the process and practice of dispute resolution through mediation pertaining to international agreement settlement. 

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What you need to know 

Business confidence increases in Sri Lanka 

Lanka Monthly Digest (LMD) reported that business confidence regained 27 points in January 2024, per its Business Confidence Index (BCI) barometer. While the temporary upswing of the barometer indicates economic improvement, it continues to languish at 38 points below the all-time average of 123 points, which volatility is likely due to 2024 being an election year. 

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Sri Lanka shipping costs to increase amidst Red Sea troubles 

Industry analysts warn that Westbound freight rates could increase. This trend is likely to cascade to the East as well, as ships and containers experience delays when passing through the Red Sea due to Houthi attacks. 

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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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