Category: News

Sri Lanka’s export earnings in October 2022 drops 8.18 percent to 1,094 million dollars compared to the same period last year due to a decrease in earnings from apparels, eat, rubber, coconuts as the key export market are going high inflation and an energy crisis.

“This was mainly due to the decrease in export earnings from Apparel & Textiles, Tea, Rubber based Products, Coconut based Products, Spices & Essential Oils and Fisheries sector. Further, the impact of global crisis also affecting to decrease export earnings of major products,” Exports Development Board said in it’s report.

In the ten months to October, exports were up 9.33 percent to 11 billion US dollars.

“For the next six months, there is a very low number of orders,” a senior official at EDB told Economy Next.

“Hence the currency coming in is a little bit low but based on the trend it is like one billion a month during these last ten months and up to October, we have received over 10 billion of export revenue and first being the apparel.”

Sri Lanka is currently in the worst currency crisis in the history of the island’s soft-pegged central bank with the rupee collapsing from 200 to 360 in a failed attempt to float the currency (suspend convertibility) with a surrender rule in place.

At 370 the surrender rule and dollars sales continue.

Exports of Apparel & Textiles fell 13.19 percent to 441.89 million dollars in October 2022.

Tea exports in October fell 0.76 percent to 108.7 million US dollars.

“We have to be very agile these days because markets are changing and our traditional markets, especially the western markets going forward might be disrupted a little more,” another official at EDB said.

“So we have to now look at alternate markets because there is a global disruption in exports and imports and the only way out is to find other markets.”

Export earnings from Rubber based products have decreased by by 6.10 percent to 86.3 million dollars, EDB said exports of pneumatic & Retreated Rubber Tyres & Tubes did not perform well.

Coconut products fell 7.12 percent to 72.41 million dollars.

Export of Seafood dipped by 20 percent to 19.56 million dollars. Crabs exports have done well, EDB said.

Source: Economy Next

Elections are likely to be held in Sri Lanka well before the 2024 deadline, the British weekly newspaper, The Economist has predicted.

According to the prediction, Sri Lanka’s economy will contract, but by less than in 2022.

The prediction has been made in The Economist’s new publication, “The World Ahead 2023”.

“President Ranil Wickremesinghe, who assumed the presidency in July 2022, will struggle to confront the public discontent that forced the resignation of his predecessor Gotabaya Rajapaksa,” the report said.

The report also points out that protesters see Ranil Wickremesinghe as a stooge for the Rajapaksa clan, particularly since he chose Dinesh Gunawardena as the Prime Minister, an ally of the Rajapaksa family.

“Protests and strikes will weigh on the government and elections are likely well before the 2024 deadline” it added.

The Economist’s other predictions include:

GDP growth : – 0.2%

GDP per head : US$ 4,230

Inflation : 66.4%

Budget Balance (%GDP) : – 4.2

Population : 21.7m

Source: Newswire

A seminar to mark the advent of the Supreme Lanka Council in Nuwara Eliya yesterday (27) came under attack hours before it was due to begin.

In the early hours of the morning, a group had come to the venue and destroyed the display boards for the event.

Organisers lodged a complaint with Hanguranketha police which accuses the SJB organiser for the area Jayalath Dissanayake, who is also the brother of SLPP MP S.B. Dissanayake, of being responsible.

Despite the incident, the SLC held the meeting with its chairman Wimal Weerawansa presiding.

The 10.6 million liters of diesel donation by China will be provided free of charge, said the Chinese Embassy in Sri Lanka.

Fuel will be given free to 232,749 farmers for harvesting 342,266 hectares paddy fields across Sri Lanka in Maha season 2022/23 (20L/hectare)

In addition, the 3,796 fishing vessels below 40 feet in Sri Lanka (1,000L/vessel) will also be given free diesel courtesy from China.

If Sri Lanka misses the December target, which now appears to be bit of a stretch, the country could still activate the International Monetary Fund (IMF) rescue package to unlock US$ 2.9 billion over a four-year span as very good progress is being made in the debt restructuring front, particularly with the country’s bilateral lenders.

Speaking to media last week, Central Bank Governor Dr. Nandalal Weerasinghe shrugged off certain reports which claimed that Sri Lanka could not activate the deal till next March if the December target is missed.

“The December target appears a bit optimistic as of now. But if we miss that, we still have time until January,” he said.

Dr. Weerasinghe said that IMF Board meetings happen at least three days a week with many items in their agenda and thus missing the December target is not a big deal.

In a presentation made to creditors in September, the timelines drawn up by the Sri Lankan authorities showed that they expected to receive IMF Board approval for the staff-level agreement reached in early September by mid-December or early January 2023 after obtaining financing assurances from the bilateral creditors by mid-November.

To expedite the process, the authorities are promoting an adhoc bilateral platform for the Paris Club and non-Paris Club creditors to come together to give their financing assurances to the IMF, having debated among themselves.

The majority of Sri Lanka’s bilateral credit is held by the two non-Paris Club countries China and India.

“We are very confident in the way the discussions are going ahead in getting their assurances. So, the IMF can submit the proposal to the Board sooner,”said Dr. Weerasinghe, expecting the assurances to be forthcoming in the next couple of weeks.

Meanwhile, the financing assurances from private creditors would mean Sri Lanka is making a ‘good faith’ effort to reach a collaborative agreement with them which includes engaging in early dialogue and sharing relevant information on a timely basis.
They have formed two creditor committees – one consisting of 100 members of international investors and another consisting of eight local private banks holding slightly in excess of a billion dollars worth ISBs.

Besides obtaining creditor assurances, Sri Lanka also has to make good on some prior actions such as raising taxes, as part of its revenue-based fiscal consolidation efforts, raise interest rates to contain consumption and investments and end monetary financing, allow greater foreign exchange rate flexibility, strengthen Central Bank independence, and embark on reforming state-owned enterprises.