Business

Decline in labour force in 2020 first half- Part II

Published

5 years ago

2021/05/11

Extracts from the Central Bank of Sri Lanka report, ‘Recent Economic Developments: Highlights of 2020 and Prospects for 2021’

Continued from yesterday

* With a notable increase at the beginning of the year, prices of items in the Non-food category remained mostly unchanged during the period from April to June 2020, mainly due to the lower demand for non-essential goods and services and non-adjustment of administered prices such as transport fare, communication charges, electricity and water charges with the spread of the COVID-19 pandemic in the country. Similar to 2019, an increase in house. Rentals in Housing, Water, Electricity, Gas and other Fuels sub-category, which occupies the largest share in the Non-food category in both CPI baskets, took place in January 2020, yet at a comparatively lower magnitude. This increase at the beginning of the year was coupled with an increase in tuition fees for secondary education in the Education sub-category, and resulted in the highest increase observed in the Non-food category since January 2019. Moreover, an increase in payments to medical laboratories in the Health sub-category occurred in March 2020.

However, a decline in the same was recorded in August 2020, contributed to by the downward price revision of the Full Blood Count (FBC) laboratory test. Meanwhile, Lanka IOC (LIOC) revised petrol (92 octane) price downward from

Rs. 142 to Rs. 137 per litre from 06 April 2020, but increased back to the original price on 17 May 2020. However, LIOC reduced the price of petrol (92 octane) back to Rs. 137 with effect from 20 May 2020, tallying the price maintained by the Ceylon Petroleum Corporation (CPC). Prices of arrack, beer and cigarettes have remained unchanged thus far during the year, while prices of arecanuts and betel leaves increased significantly August 2020 onwards. Meanwhile, prices of items in the Non-food category followed an increasing trend from July 2020 onwards.

Consumer Price Indices

National Consumer Price Index

* The NCPI, which recorded 137.0 index points in January 2020, declined to 134.8 index points in April, before reaching 138.9 index points in September 2020. The increase observed in the NCPI in January 2020 was driven by the increases observed in prices of items in both Food and Non-food categories. Afterwards, the NCPI declined for two consecutive months in

March and April 2020 driven by the decrease in prices of items in the Food category. The NCPI demonstrated a reversal of its previous downward trend and increased thereafter till June 2020, while the prices of items in the Food category remained as the sole contributor towards this increasing momentum. However, the NCPI remained unchanged in both February and July 2020 since the decline of the prices of items in the Food category was nullified by the increase observed in the prices of items in the Non-food category. Further, the increase observed in the NCPI in both August and September 2020 was contributed by the increases of prices of items in the Food and Non-food categories.

Colombo Consumer Price Index

* The CCPI, which recorded 134.6 index points in January, reached 133.4 index points in March 2020 and increased to 136.3 index points in September 2020. The increase in January 2020 was supported by the movement of the prices of the items in both the Food and Non-food categories. Meanwhile, the movement of prices of items in the Food category contributedtowards the decline and the increase observed thereafter in March and April 2020, respectively.

Month-on-month increases demonstrated by the CCPI in the next three consecutive months until July 2020 and September 2020 were mainly due to the price increases of the items in both Food and Non-food categories.

Headline Inflation

* NCPI based year-on-year headline inflation remained above mid-single digit level during the period from January to September 2020.

The year-on-year headline inflation, which recorded 7.6 per cent in January, peaked at 8.1 per cent in February 2020, the highest since November 2017 and reached 6.4 per cent in September 2020. Meanwhile, NCPI based annual average inflation increased continuously from 4.1 per cent in January to 6.2 per cent in September 2020.

* CCPI based headline inflation remained mostly within the targeted range of 4-6 per cent during the period from January to September 2020. Accordingly, the year-on-year CCPI inflation increased from 5.7 per cent in January to 6.2 per cent in February 2020, moved on a declining trend afterwards until reaching 3.9 per cent in June and increased thereafter to 4.0 per cent in September 2020. Meanwhile, the annual average CCPI based inflation remained stable during the period from January to September 2020, in which it recorded 4.5 per cent in January and reached 4.7 per cent in September 2020.

Core Inflation

* Core inflation remained at stable levels yet notably lower than that of the previous year, driven by the statistical effect of the high base which prevailed throughout the previous year owing to the significant hike in house rentals observed at the beginning of 2019. Even though an upward revision in house rental occurred in January 2020, the effect was comparatively minimal. Accordingly, amidst monthly increases, the year-on-year NCPI based core inflation moved on a decreasing trend from 3.9 per cent in January to 3.2 per cent in March and remained unchanged in April before continuously increasing to reach 4.8 per cent in September 2020. Meanwhile, CCPI based year-on-year core inflation was at 3.0 per cent in January and recorded 2.9 per cent in September 2020.

Producer Price Inflation

* The producer price inflation measured by the year-on-year change in the Producer’s Price Index (PPI, 2013 Q4*100) increased initially to 5.6 per cent in January, peaked at 7.8 per cent in July and declined to 7.7 per cent in August 2020. The year-on-year producer price inflation of all three sub-sectors, namely, agriculture, manufacturing and electricity and water supply demonstrated overall increases during the first eight months of the year, yet recording notable fluctuations in between.

PRICES, WAGES, EMPLOYMENT AND PRODUCTIVITY

Inflation Expectations

* Inflation expectations of the corporate sector moved mostly within 4-6 per cent, however demonstrating mixed movements, during the period from January to September 2020, while inflation expectations of the household sector remained above the inflation expectations of the corporate sector. Short term inflation expectations of both the corporate sector and household sector remained above their longer term inflation expectations. Accordingly, disruptions to domestic production and supply chains along with containment measures taken to combat the spread of the COVID-19 pandemic, import restrictions imposed by the government, depreciation of the local currency, relaxed monetary policy stance and expected recovery in demand and economic activities with the ease of restrictions related to the COVID-19 pandemic emerged as main reasons for their high inflation expectations. Meanwhile, subdued demand and economic activities, and fall in international oil prices amidst the spread of the COVID-19 pandemic, upswing in home gardening, expected improvements in domestic production, expected relaxation of import restrictions and recovery of supply chains with the ease of the COVID-19 pandemic were cited by respondents as reasons for their low inflation expectations in the longer term.

Wages

* Nominal wages of public sector employees, as measured by the public sector wage rate index (2016*100), increased significantly by 11.1 per cent during the period from January to August 2020 compared to the same period of 2019. This increase was due to the introduction of a new non-pensionable monthly interim allowance of Rs. 2,500 with effect from

01 July 2019 to all public sector employees and the addition of final tranche of the special allowance and interim allowance to the basic salary of public sector employees, with effect from 01 January 2020. Accordingly, real wages of the public sector employees also increased by 4.3 per cent during the period from January to August 2020 compared to the corresponding period of the previous year.

* Nominal wages of the employees in the formal private sector, as measured by the minimum wage rate index (1978 December*100) of employees, whose wages are governed by the Wages Boards Trades, increased marginally by 0.2 per cent during the period from January to August 2020 compared to the same period of 2019. However, real wages of employees in the formal private sector declined by 4.4 per cent during the period from January to August 2020 compared to the corresponding period.

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Business

Steps leading to the achievement of SL’s national interest in IOR

Published

11 hours ago

2026/02/24

Sahan Weerasooriya

Prof. Nobukatsu Kanehera: ‘Rulesbased order violated.’

Sri Lanka needs to build awareness, effective policies and encourage regional multilateral frameworks to develop a multi-pronged approach to secure its national interest and safeguard regional stability in the Indian Ocean Region (IOR), as the region together with its seabed have become an area of strategic competition, former Assistant Chief Cabinet Secretary to former Japanese Prime Minister Shinzo Abe, Prof Nobukatsu Kanehara said.

“The Indian Ocean has been a maritime highway for millennia, with Sri Lanka being a midway point of the flow of trade, culture, technology and intellectual progress, Prof Kanehara said at the 4th Pathfinder Foundation Sri Lanka Indian Ocean Security Council Conference held recently at the Cinnamon Grand Hotel. The forum was presided over by Pathfinder Foundation Sri Lanka Chairman Ambassador (retd.) Dr. Bernard Goonetilleke.

The forum’s purpose was to obtain expert commentary regarding the need for Sri Lanka to ‘up its game’ in the IOR.

Abe said that from the 1870s onwards, the Indian Ocean had become the global communications highway, with the British Empire laying submarine cables from Aden to Mumbai, linking Europe to South Asia.

‘Since then, with the passage of time, Ceylon, and later Sri Lanka, has seen the bulk of the global digital communications umbilical laid through its maritime domain of influence, with over a dozen such cables laid over the island’s Exclusive Economic Zone (EEZ) thus far, he said.

Prof. Kanehera added: ” With the rise of Artificial Intelligence (AI) and increasing digitisation, such submarine cables have become critical strategic infrastructure for the island nation as well as the region.

‘This timely conference came as world powers rushed to secure critical minerals needed to maintain a technology edge over rivals, both militarily and economically, disrupting the longstanding rules-based order, especially at sea and in trade.

‘The lack of cognition regarding how to understand and navigate the return to a near Cold War era strategic competition in the Indian Ocean, and increasingly in the sub-surface domain and the seabed, among Sri Lanka’s policy making community, bureaucrats and public leaves the economically weakened island nation more vulnerable to geopolitical coercion, shocks and tug-o-war, which will likely increase in the coming decade.’

By Hiran H Senewiratne

Business

Automobile Association of Ceylon donates towards Disaster Relief Support Fund

Published

11 hours ago

2026/02/24

Sahan Weerasooriya

Automobile Association of Ceylon (AAC) donated Rs. 25 Million towards the Disaster Relief Support Fund to assist the Ditwah Cyclone victims.

A donation was handed over to Dr. S N Kumanayake, Secretary to the President of Democratic Socialistic Republic of Sri Lanka by Dhammika Attygalle, President – AAC at the Presidential Secretariat on the 19th February 2026 in the presence of Executive Committee members.

Dhammika Attygalle President AAC (third from Left) handing over the cheque to Dr S N Kumanayake, Secretary to the President of Democratic Socialistic Republic of Sri Lanka.

In the picture L-R Lasitha Gunaratne- EXCO Member – AAC, Devapriya Hettiarachchi – Secretary -AAC, P H Liyanage, P B Kulatunga & Indunil Udaya – Members of the EXCO – AAC

Business

‘Sri Lanka’s first AI-powered digital trainer for Banca partners’

Published

11 hours ago

2026/02/24

Sahan Weerasooriya

A few highlights from the NAVI Launch event.

HNB Assurance PLC recently introduced NAVI, The Digital Trainer, a new AI-powered training companion designed to support its banca staff with instant, reliable access to knowledge, whenever they need it. The solution was unveiled at Partnership Life, the company’s annual forum dedicated to celebrating the performance of its Partnership Channel.

Built to make learning simpler and more accessible, NAVI is a voice-enabled AI chatbot that helps banca staff quickly find product information, policy details, and process-related guidance by drawing from a centralized knowledge bank. Whether on the go or at the point of customer interaction, NAVI ensures that answers are never out of reach.

Sharing his thoughts, Sanesh Fernando, Chief Business Officer / GM – Partnership Channel at HNB Assurance, opined, “With NAVI, our intention is to make learning a part of everyday conversations. By combining chat and voice capabilities, we are making it easier for our officers to learn on demand and perform with greater confidence.” He further noted that it is this continuous focus on meaningful innovation that has consistently set HNB Assurance apart within the bancassurance space. “Solutions like NAVI reflect the way we think and operate as a Partnership Channel. This commitment to enabling our partners and bancassurance officers through practical, forward-thinking initiatives has been a key driver in our journey, one that has seen us being recognized as the Best Life Bancassurance Provider for five consecutive years, while also delivering strong and sustained growth year after year.”

Commenting on the launch, Suneth Jayamanne, Chief Information Officer / GM of HNB Assurance, said, “We see NAVI as a support system rather than a piece of technology. Our Bancassurance officers operate in fast-paced environments and having instant access to the right information can make all the difference. NAVI is about helping our people feel more prepared, more confident, and more connected to the knowledge they need to serve customers better.”

The launch of NAVI was marked by an engaging reveal featuring an AI-generated avatar that introduced the digital trainer and its capabilities, symbolizing a shift towards a more intuitive and people-friendly approach to learning.

As HNB Assurance continues to expand its Partnership Channel, innovations such as NAVI highlights the company’s focus on building strong, well-supported partnerships, blending technology with a deep understanding of how people learn, and work.

HNB Assurance PLC (HNBA) is one of the fastest growing Insurance Companies in Sri Lanka with a network of 79 branches. HNBA is a Life Insurance company with a rating of ‘A’ (lka) by Fitch Ratings Lanka for ‘National Insurer Financial Strength Rating’. Following the introduction of the segregation rules by the Insurance Regulator, HNB General Insurance Limited (HNBGI) was created and commenced its operations in January 2015; HNBGI continues to specialize in motor, non-motor and Takaful insurance solutions and is a fully owned subsidiary of HNB Assurance PLC. HNB General Insurance has been assigned a ‘National Insurer Financial Strength Rating’ of ‘A’ (lka) by Fitch Ratings Lanka Limited. HNBA is rated within the Top 100 brands and Top 100 companies in Sri Lanka by LMD and HNB Assurance has won international awards for Brand Excellence, Digital Marketing and HR Excellence including the Great Place To Work® Certification, and won many awards for its Annual Reports at award ceremonies organized by the Institute of Chartered Accountants of Sri Lanka.