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Banks have not passed on reduced interest rates announced by CB to entrepreneurs; lack of demand another bugbear

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By Saman Indrajith

Entrepreneurs have not really benefited from the drop in inflation, due to the lack of demand and shrinking economy, Chairperson of Sri Lanka United National Businesses Alliance (SLUNBA), Tania Abeysundara said on Wednesday in a televised interview.

She said that their businesses are operating at 40 percent capacity and most of the money they earn is taken back by the government, through increased utility bills and taxes.

“We are not benefiting. We need to buy goods to ensure the businesses keep on operating. What we produce goes into the market, people consume and we get money. It’s a rotation. Now the consumer market is down by 40 to 60 percent. Food consumption is down by at least 40 percent, and the finished clothing market is down by 60 percent,” she said.

Abeysundara mentioned that inflation has dropped because there is more supply than demand. Companies can’t reduce supply further without shutting down certain operations.

She said that the Central Bank has asked the banks to reduce interest rates. However, the banks only give loans at a floating rate and the rate is still about 23 percent, she said.

“How do we run a business after taking a loan at 23 percent?” she said.

Abeysundara added that the government has also not done enough to encourage foreign investments. Even now, most foreign investors have to come meet the Minister and his or her family, she said.

“There is no reason to invest in Sri Lanka. Even Sri Lankan entrepreneurs aren’t getting any benefits. We are an import economy, and we cover it by taking loans. Out of the importers, about 30 percent do not pay taxes because they work with cash and not through banks,” she said.

These importers send most of the money through the black market and manage to clear the imported goods through their connections, she said.They also control the supply of goods, she added.

She said that all countries had achieved development by promoting SMEs, and that the Asian Tigers, and even China, had promoted SMEs to ensure that their economies could provide jobs to people.



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Maldives Coast Guard Ship Huravee arrives in Colombo

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The Maldives Coast Guard Ship Huravee arrived at the Port of Colombo for replenishment purposes on 02 Mar 26. The visiting ship was welcomed by the Sri Lanka Navy (SLN) in compliance with time-honoured naval traditions.

The ship is a 48.9m long Offshore Patrol Vessel which is commanded by Lieutenant Colonel Ahmed Nafiu Mohamed.

Meanwhile, the ship’s crew is scheduled to visit several tourist attractions in the city of Colombo, during their stay in the island.

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AKD warns of far reaching economic consequences of Middle East war

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Anura

President Anura Kumara Dissanayake yesterday called for an immediate and peaceful resolution of the escalating Middle East conflict, warning that the crisis could have far-reaching repercussions on the global economy, including Sri Lanka.

Addressing Parliament, the President stressed that no military conflict benefited humanity, particularly at a time when destructive military technologies were rapidly advancing.

“Any military conflict does not create a favourable situation for any group of people,” he said, urging all parties to make urgent commitments towards peace. “As Sri Lanka, our position is that all parties involved in this war must, as soon as possible, take steps toward a peaceful world.”

He cautioned that Sri Lanka could not remain insulated from the fallout from the conflict, noting that disruptions to global oil and gas supplies, threats to migrant workers in the Middle East, and potential shocks to tourism, remittances, shipping and aviation were real concerns.

A national programme was being formulated to mitigate the impact, he said, adding that its success would hinge on broader international efforts to restore stability, the President said.

Acknowledging public anxiety shaped by past economic hardships, President Dissanayake said social stability could not be ensured through rhetoric alone but required tangible guarantees that citizens would not face another crisis.

While noting that the government had successfully navigated multiple challenges since assuming office, he described the Middle East situation as distinct due to the uncertainty surrounding its duration and outcome.

The government, he said, was closely monitoring developments. The Central Bank had conducted a review with a report on the likely economic impact expected shortly. The Ministry of Finance is also preparing an assessment of the potential effects on public life, alongside measures to ensure the uninterrupted provision of essential services locally and for Sri Lankans overseas.

“The primary responsibility for finding a path out of the crisis rests with the Government,” he said, calling on Parliament and the public to collectively confront the challenge under a unified national plan.

Providing a detailed account of the country’s energy reserves, the President said storage capacity rather than supply remained the key constraint. Excluding the Indian Oil Corporation tanks in Trincomalee, total storage capacity at Kolonnawa and Muthurajawela stands at approximately 150,000 metric tons.

Diesel stocks were currently sufficient for 33 days, with refining contributing around 1,800 metric tons daily. Petrol reserves will last 27 days, with a 35,000 metric ton shipment due on March 7 or 8 expected to extend availability to around 40 days.

Aviation fuel stocks are adequate for 49 days, supported by both daily refining and imports. Scheduled shipments include vessels from RM Parks on March 14, Sinopec on March 17, IOC on March 21 and the Ceylon Petroleum Corporation on March 28.

Crude oil supplies were sufficient to operate the refinery for 26 days, with an additional shipment expected to extend operations by a further 18 days, the President said.

“Because of this, there is no crisis regarding oil,” the President assured Parliament.

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Pope invited to visit Sri Lanka

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President Anura Kumara Dissanayake has invited His Holiness Pope Leo XIV to visit Sri Lanka.

The official invitation was handed over by Minister Bimal Ratnayaka to the Vatican’s Under Secretary for Relations with the States, at the Vatican, yesterday, during the Minister’s official visit to Italy, the President’s Media Division said.

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