JOINT APPAREL ASSOCIATION FORUM SRI LANKA (JAAFSL)
SRI LANKA UPDATE | 17 May 2024 – 31 May 2024
💰 The Economy
📰 Finance Minister announces that economy has stabilized and growth is emerging
State Minister of Finance announced that Sri Lanka’s economy has stabilized and is now experiencing growth. The Sri Lankan Rupee has appreciated from LKR 360 per USD in 2022 to LKR 300 per USD, making goods and services cheaper, reducing inflation, and easing debt servicing. The Gross Domestic Product (GDP), which contracted by 7.8 percent in 2022, returned to growth in late 2023, with Quarter 4 growth at 4.5 percent.
Link: https://tinyurl.com/3jwuw9ye
📰 April exports exceed USD 1.1 billion
In April 2024, Sri Lanka’s total exports, including merchandise and services, reached USD 1,114.22 million, up 1.25 percent from April 2023. Merchandise exports decreased by 4.1 percent to USD 813.81 million, while services exports rose by 19.28 percent to USD 300.41 million. Tea exports, comprising 12 percent of merchandise exports, grew by 2.22 percent to USD 95.46 million, with significant increases in bulk tea and exports to United Arab Emirates, Iraq, and Saudi Arabia. Rubber products exports rose by 20.18 percent to USD 66.58 million, and coconut-based products saw a 17.73 percent increase. Information Communication Technology (ICT) exports, transport and logistics services for increased by 21.6 percent and 24.94 percent, respectively. From January to April 2024, merchandise exports grew by 3.55 percent to USD 3,982.71 million, and services exports increased by 6.47 percent to USD 1,048.61 million.
Link: https://tinyurl.com/3hv7fdcm
📰 Banks report LKR 60 billion in weekly average lending Sri Lanka’s weekly lending volumes have risen to LKR 60 billion due to falling interest rates, with prime customers favouring short-term loans, according to the Central Bank Governor. Despite adjusted deposit rates, lending rates remain high, influenced by credit demand and risk factors. The Average Weighted Prime Lending Rate (AWPLR) is 9.68 percent, while the Average Weighted New Lending Rate (AWNLR) is around 12-12.5 percent.
Link: https://tinyurl.com/mr2fejah
📰 Trade and investment team from Fujian Province in China visits the Board Of Investment (BOI) in Sri Lanka A delegation from the China Council for the Promotion of International Trade (CCPIT) from Fujian Province met with the Board of Investment (BOI) Chairman and BOI officials to discuss trade and investment opportunities. The delegation included high level officials from the CCPIT Trade and Investment Department.
Link: https://tinyurl.com/35ub8te7
📰 The Export Development Board (EDB) launches “Creative Sri Lanka 2030” project The Sri Lanka EDB launched the “Creative Sri Lanka 2030” project in collaboration with the Institute for Future Creations (TIFC), the London College of Fashion (UAL), and the Chamber of Ethical Lifestyle Enterprises (CELE). The initiative aims to promote ethical, sustainable manufacturing and boost exports of value-added niche products. Ten pioneering Sri Lankan brands will be selected for a capacity-building programme and showcased at an international fashion exhibition in London.
Link: https://tinyurl.com/mry8m533
📰 *Mastercard collaborates with LankaPay to strengthen the cybersecurity infrastructure of Sri Lanka’s financial services sector * Mastercard has partnered with LankaPay to enhance Sri Lanka’s financial cybersecurity through the Financial Sector Computer Security Incident Response Team (FinCSIRT). Utilizing Mastercard’s “RiskRecon”, the partnership aims to protect financial institutions and consumer data by providing detailed cyber risk insights and managing vendor risks. Leaders from both organizations emphasized the importance of robust cybersecurity for a secure digital economy.
Link: https://tinyurl.com/4s9y3s56
📰 Sri Lanka seeks World Bank assistance to help draft regulations for the anticipated Starlink satellite internet service The Sri Lankan government has enlisted the World Bank’s expertise to draft new telecommunication regulations for the introduction of Elon Musk’s Starlink satellite internet services. Starlink is now open for pre-order in Sri Lanka, with service expected to begin in 2024 pending regulatory approval. State Minister of Technology Kanaka Herath mentioned that consultations with countries that have already implemented such regulations will also be conducted.
Link: https://tinyurl.com/arwcfabs
📰 Central Bank launches “Financial Literacy Roadmap of Sri Lanka” 2024-2028 The Central Bank of Sri Lanka launched the Financial Literacy Roadmap, part of the National Financial Inclusion Strategy, to improve financial behavior and resilience among Sri Lankans. It emphasizes responsible use of financial products and includes an action plan with stakeholder roles, supported by the United Nations Development Programme.
Link: https://tinyurl.com/22n4kju5
⚖ Politics & Policy
📰 President says Presidential Election to be held as planned
President Ranil Wickremesinghe confirmed the upcoming Presidential Election, with funds allocated for it. He noted no candidates have proposed abolishing the executive powers.
Link: https://tinyurl.com/4yb82abz
📰 Sri Lanka plans to join BRICS+ with India support The Sri Lankan Foreign Minister expressed interest in joining BRICS+ (an economic alliance of Brazil, Russia, India, China and South Africa and others), highlighting its appeal since India became a member. Sri Lanka plans to consult India before formally applying.
Link: https://tinyurl.com/5fa4x66y
📰 Committee on Public Finance (CoPF) green lights Public Debt Management Bill The CoPF Chairman confirmed approval of the Public Debt Management Bill, establishing a debt office in the Finance Ministry, regulating government debt, and preventing risky borrowing by State-Owned Enterprises (SEOs). Published in the Gazette on April 18, 2024, the Bill was tabled in Parliament on April 26, 2024 by President Ranil Wickremesinghe.
Link: https://tinyurl.com/7rdj2pab
📰 Sri Lanka presents Economic Transformation Bill and Public Financial Management Bill in Parliament The Sri Lankan Parliament introduced the Economic Transformation Bill. This is among several bills emphasized by the Government crucial for strengthening the nation’s economy. The Economic Transformation Bill aims to prevent economic crises. It seeks to implement reforms to enhance international trade, address climate change issues, and establish a new Economic Commission to attract investments.
Link: https://tinyurl.com/mmsntt2f
📰 Cabinet nod to gazette draft bills to amend Anti-Dumping and Safeguard Measures The Cabinet of Ministers approved the publication of draft bills to amend the Anti-Dumping and Countervailing Duties Act, No. 2 of 2018, and the Safeguard Measures Act, No. 3 of 2018, in the Government gazette. These amendments aim to enhance the effectiveness and applicability of the current legislation, strengthening Sri Lanka’s trade defense mechanisms against unfair trade practices. The proposal, submitted by President Ranil Wickremesinghe, received clearance from the Attorney General and is part of the Economic Transformation bill preparation.
Link: https://tinyurl.com/7cumtcsj
📰 New Public Procurement law to end the accepting of unsolicited proposals The Sri Lankan government is set to enact a new Public Procurement Law to address corruption and inefficiencies in government procurement. The law aims to enhance transparency, accountability, and effectiveness in the procurement process, replacing the current system based on outdated guidelines. It will establish a regulatory body, require all procurement transactions over LKR 1 billion to be conducted through an e-Government Procurement System by 2025, and fulfill International Monetary Fund conditions for public sector reforms.
Link: https://tinyurl.com/ydkkbahx
📰 President calls for long-term plan to advance Sri Lanka’s energy sector transformation President Ranil Wickremesinghe has urged all stakeholders, including private sector investors, to collaborate in developing a long-term plan to advance Sri Lanka’s energy sector transformation and promote green growth efforts.
Link: https://tinyurl.com/5hxcu3b6
📰 Sri Lanka adopts National Strategy to Promote Inclusive and Sustainable Businesses Sri Lanka joined the 2024 ‘Impact Harvest Forum’ in Bangkok, focusing on inclusive business investment. This aligns with Sri Lanka’s strategy to promote inclusive and sustainable businesses, aiming to achieve the United Nations’ Sustainable Development Goals (SDGs). The forum aimed to identify investment opportunities, particularly in agriculture, and foster sustainable economic development.
Link: https://tinyurl.com/y9dc794u
⁉ What you need to know
📰 EDB launches Creative Sri Lanka 2030’ project The EDB launched the ‘Creative Sri Lanka 2030’ to promote ethical, sustainable manufacturing and boost exports of niche products. The EDB will select 10 Sri Lankan brands to showcase sustainability globally, with capacity-building and international exhibitions to integrate Sri Lankan heritage into global markets.
Link: https://tinyurl.com/8v3pdbbe
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.
For inquiries, contact harini.bandaranayake@adfactorspr.com