SRI LANKA UPDATE | 25 – 31 AUGUST 2023
The Economy:
Sri Lanka’s July exports decline by 12 per cent YoY (year on year) to USD 1 billion – While Sri Lanka’s export sector maintain a performance of over USD 1 billion in July compared to June 2023 YoY, overall exports declined by 12 per cent as a result of weak demand in key regions. According to statistics from the Export Development Board (EDB), merchandise export revenue climbed by 2.18 per cent month over month to USD 1 billion in July 2023. However, numbers have declined by 11.79 per cent annually. According to the EDB, the decline in goods exports results from reducing demand for export goods, particularly for clothing and textiles, rubber and rubber-based products and coconut and coconut-based products. Comparing January to July 2023 to the same period in 2022, total merchandise exports significantly decreased by 10.26 per cent to USD 6.89 billion.
Sustainable Development Goals (SDGs) Taxation Framework for Sri Lanka presented – The United Nations Development Program (UNDP) delivered the Taxation Framework for SDGs to the Government, suggesting the realigning and utilisation of taxes in Sri Lanka to achieve the SDGs. According to UNDP, taxes are fundamentally crucial for addressing intersectional inequality issues and are closely related to gender equality.
Visa sees digital payments in Sri Lanka doubling to USD 14 billion by 2027 – World leader Visa stated that digital payments will quadruple to USD 14 billion by 2027 and committed to assisting broader usage, especially in the public sector. According to Visa, the value of digital payments will reach USD 7 billion by the end of 2023 and expand at a 20 per cent compound annual growth rate (CAGR) over the following four years, reaching USD 14 billion. By 2027, it is predicted that e- commerce will reach USD 2.5 billion, and 10.7 million people will be e-commerce consumers. Visa stated that it is steadfastly dedicated to working with banks, fintechs, telecoms, state- owned companies, the regulator and the Government to accomplish this goal.
Politics & Policy:
Sri Lanka extends Domestic Debt Restructuring (DDR) deadline to 11 September – Sri Lanka is anticipated to complete the DDR prior to the first review of the USD 2.9 billion IMF bailout programme. The country evaluation will be conducted by the International Monetary Fund (IMF) team beginning on September 14th. Legislative obstacles and increasing pressure to restructure the nation’s biggest social security fund have delayed the DDR’s full implementation. However, the Central Bank of Sri Lanka (CBSL) and private investors recently completed the restructuring of the domestic debt denominated in dollars.
Sri Lanka steps up efforts for more breakthroughs in Chinese market – 58 Sri Lankan companies participated at the China-South Asia Exposition held in Kunming over five days. The Sri Lankan participation was organized by the Department of Commerce under the Ministry of Trade, Commerce and Food Security. For Sri Lankan businesses, this was an avenue to introduce Sri Lankan products to the Chinese market and attract new customers.
Fresh Government Gazette further boosts Colombo Port City – In its quest to make Colombo Port City an internationally competitive Special Economic Zone (SEZ), the Colombo Port City Economic Commission (CPCEC) gained a significant advancement last week, when the rules for
exemptions or incentives to companies classified as Businesses of Strategic Importance (BSI) were authorized by the Parliament. This was authorized together with a complete incentive scheme established by the Commission in cooperation with the Ministry of Investment Promotion. Extraordinary Gazette No. 2343/60 was published on August 24th 2023.
New circular for banks to bridge gap in lending rates, boost policy measures – Governor of the CBSL announced intentions to issue a new circular to bridge gaps in market lending rates while advancing policy initiatives. At a post-monetary policy review meeting, he stressed the significance of narrowing the interest rate disparity by at least 3 per cent within a specific time frames. The Governor emphasized the prevalent disparities between interest rates on the policy and market sides.
Hayleys Fabric awarded Best SDG Impact at ESG World Summit & Growth, Resilience, Innovation and Talent (GRIT) Awards – Hayleys Fabric PLC received the Best SDG Impact Award at the prestigious ESG World Summit and GRIT Awards held in Thailand, marking another milestone in its sustainable journey. The Awards, organised by Corpstage, a leading sustainability consultancy entity and the ESG Research Foundation, seek to advance green initiatives and responsible capitalism while honouring outstanding businesses that are actively pursuing environmental, social and governance (ESG) best practices.
National Chamber of Commerce of Sri Lanka (NCCSL) forum on SL – Australia trade and investment – The National Chamber of Commerce of Sri Lanka hosted a debate to discuss increasing bilateral trade and investment between Sri Lanka and Australia. High Commissioner of Australia to Sri Lanka Paul Stephens was the guest speaker, while Chitranganee Wagiswara, the Sri Lankan High Commissioner to Australia connected digitally for the discussion. The primary goal of this meeting was to promote and strengthen bilateral trade and investment between Australia and Sri Lanka in the current trade climate, investment prospects, services, policies and other relevant points of discussion.
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