SRI LANKA UPDATE | 17 – 23 NOVEMBER 2023
The second reading of Budget 2024 passed in Parliament – Parliament approved the Appropriations Bill for the fiscal year 2024 on its second reading by a majority of 42 votes. As part of the larger economic strategy, President Ranil Wickremesinghe delivered the 78th budget speech before Parliament on November 13 as Minister of Finance. The Appropriations Bill of 2024 states records that LKR 6,978 billion will be spent by the Government an increase of about 33 per cent over 2023 levels. It is projected that the fiscal year 2024 will have a budget deficit of LKR 2,851 billion.
Sri Lanka to receive USD 330 million (International Monetary Fund) IMF tranche in December – Sri Lanka is to receive the second tranche of the USD 330 million IMF disbursement next month. The programme’s first review was completed in October 2023, and on October 19, 2023 a Staff Level Agreement (SLA) was established. The second tranche signals the country’s commitment to macroeconomic reforms, building trust and confidence to facilitate financial market transactions and foreign direct investment into the Sri Lankan economy.
IMF Mission Chief Peter Breuer stated the progress on Sri Lanka’s programme review is pending assurances from other official creditors and a favourable agreement in principle with China’s Exim Bank.A document outlining the financial parameters of the agreement-in-principle has been reached between the Export-Import Bank of China and Sri Lanka on debt restructuring.
Inflation climbs to 1 per cent in October – According to the National Consumer Price Index (NCPI), the overall inflation rate increased from 0.8 per cent in September 2023 to 1.0 per cent in October 2023 on a year-over-year (Y-o-Y) basis.
Politics & Policy:
President promises Presidential and Parliamentary polls in 2024 – President Wickremesinghe reaffirmed that the presidential and parliamentary elections will proceed as scheduled in 2024. He assuaged opposition worries of possible delays during the discussion of the Appropriations Bill 2024 in Parliament. The President emphasised there were no obstacles to holding all municipal and provincial council elections as well.
LKR 10 billion allocated for elections – The State Minister for Plantations, Enterprise Reforms, and Finance, disclosed that LKR 10 billion had been set aside expressly for elections. The State Minister informed that this provision, while not explicitly outlined in the budget proposals, has been included in the estimates.
Cabinet approves concessions under proposed Sri Lanka – Thailand Free Trade Agreement (FTA) – A progressive tariff reduction roadmap for the Sri Lanka-Thailand FTA over 15 years was adopted by the Cabinet of Ministers. Following the conclusion of the rounds of discussions by December 2023, Sri Lanka and Thailand intend signing the bilateral FTA on February 3, 2024 aligned with Sri Lanka’s Independence Day celebrations on February 4.
Sri Lanka Electricity Bill gets Cabinet approval – The draft Bill on Sri Lanka Electricity was approved by the Cabinet of Ministers and published in the Government Gazette before being
introduced in Parliament for approval. The Cabinet Co-Spokesman stated that the draft Bill prepared by the Legal Draftsman, received the Attorney General’s clearance. He further claimed that in order to meet the changing needs of the business, the new Electricity Act is set to implement significant institutional changes in the industry.
Ceylon Chamber of Commerce launches Sri Lanka – Bangladesh Business Council – The 21st bilateral trade council founded by the Ceylon Chamber of Commerce, the Sri Lanka-Bangladesh Business Council (SBBC) has officially opened for business. High Commissioner for Bangladesh Tareq Md. Ariful Islam commended the Council’s launch, stating it a good opportunity to advance investment, commerce and business between the two neighbouring nations. He emphasized Bangladesh’s enormous potential as one of the world’s fastest-growing economies, with a sizable market, policies that encourage investment, a strong infrastructure, a workforce with a high level of talent and quick digitalization. The High Commissioner emphasized the necessity of broadening import sources and seeking joint venture options across other industries.
Brandix sparks new era in apparel with Artificial Intelligence – Entering a new era of innovation, Brandix is among the first Sri Lankan businesses to use Copilot for Microsoft 365, the business’ state-of-the-art artificial intelligence (AI) support tool. Copilot is a ground-breaking function that will relieve repetitive work and open doors to further innovation. Over the past 50 years, Brandix has led innovation and expansion in Sri Lanka’s apparel sector. It was also the first Sri Lankan business to collaborate with the software provider during the introduction of Microsoft Enterprise in the early 2000s.
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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 firstname.lastname@example.org