News

Central Bank expects economy to contract in second half of 2022 as well

Published

3 years ago

2022/10/7

The Sri Lankan economy is expected to contract in the second half of 2022 as well, the Central Bank of Sri Lanka (CBSL) has said in a statement.

“As per the GDP estimates published by the Department of Census and Statistics (DCS), the real economy is estimated to have contracted by 4.8 per cent in the first half of 2022, on a year-on- year basis,” the CBSL said.

The country is continuing to be impacted by tighter monetary and fiscal conditions, continuation of supply-side constraints and uncertainty surrounding the business environment amidst shortages of foreign exchange in the domestic foreign exchange market, CBSL said.

“However, a recovery in economic activity is expected in 2023 with the envisaged improvements in the supply-side, along with the timely implementation of the required reforms,” the CBSL said.

Given the current economic situation, the CBSL decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at their current levels of 14.50 per cent and 15.50 per cent, respectively.

CBSL announced on Thursday that they arrived at this decision after considering the latest macroeconomic conditions, expected developments and macroeconomic projections.CBSL said that they noted the present tight monetary conditions, the reducing pace of inflation, and both domestic and global factors have helped the country stabilize.

The current fiscal policies are complementing the monetary policy and are helping to mitigate any build-up of aggregate demand pressures, the Bank said.CBSL expects the country’s headline inflation to drop to 4 to 6 per cent over the medium term. The CBSL added that market interest rates are continuously adjusting upwards reflecting the tight liquidity conditions in the domestic money market and the further monetary policy tightening measures introduced thus far.

“With relatively high deposit interest rates offered by licensed banks, a return of currency in circulation to the banking system is also observed. In August 2022, outstanding credit extended to the private sector by commercial banks contracted for the third consecutive month in absolute terms, reflecting the impact of increased effective market lending interest rates, a moderation of economic activity, and measures to curtail non-urgent imports,” CBSL said.

Meanwhile, the current declining trend in the year-on-year growth of credit to the private sector is expected to continue during the remainder of the year, while a similar trend is expected in the growth of broad money (M2b) supply as well. Meanwhile, the need for further monetary financing is expected to reduce gradually, supported by the envisaged fiscal consolidation measures and planned reforms of major state owned business enterprises.

CBSL added that the headline inflation, based on the Colombo Consumer Price Index (CCPI), increased in September 2022, driven mainly by the recent revision of electricity and water tariffs and the increase in Value Added Tax (VAT).

“However, headline inflation is expected to follow a disinflation path in the period ahead. Subdued aggregate demand pressures resulting from tight monetary and fiscal conditions, expected improvements in domestic supply conditions, normalisation in global food and other commodity prices, and the timely pass through of such reductions to domestic prices, along with the favourable statistical base effect, will be instrumental in bringing down inflation over the medium term,” it said.

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CEYPETCO Fuel prices increased from midnight today (21)

Published

2 hours ago

2026/03/21

Priyan

The Ceylon Petroleum Corporation (Ceypetco) has announced a revision of fuel prices, effective from midnight today (21).

Accordingly,

Auto Diesel – Rs. 382 (increased by Rs. 79)

Super Diesel – Rs. 443 (increased by Rs. 90)

Petrol 92 Octane – Rs. 398 (increased by Rs. 81)

Kerosene – Rs. 255. (increased by Rs. 60)

Petrol 95 Octane – Rs. 455 (increased by Rs. 90)

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Advisory for Severe Lightning issued for Galle, Matara, Kaluthara and Rathnapura districts

Published

9 hours ago

2026/03/21

Priyan

Advisory for Severe Lightning Issued by the Natural Hazards Early Warning Centre Issued at 12.30 p.m. 21 March 2026, valid for the period until 11.00 p.m. 21 March 2026

Thundershowers accompanied with severe lightning are likely to occur at some places in the Galle, Matara, Kaluthara and Rathnapura districts after 1.00 p.m.

There may be temporary localized strong winds during thundershowers. General public is kindly requested to take adequate precautions to minimize damages caused by lightning activity.

ACTION REQUIRED:

The Department of Meteorology advises that people should:

 Seek shelter, preferably indoors and never under trees.

 Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.

 Avoid using wired telephones and connected electric appliances during thunderstorms.

 Avoid using open vehicles, such as bicycles, tractors and boats etc.

 Beware of fallen trees and power lines.

 For emergency assistance contact the local disaster management authorities.

News

Sri Lanka says it denied US request to land two aircraft at Mattala airport

Published

14 hours ago

2026/03/21

Priyan

Sri Lanka’s president says his government turned down a request from the United States to land two US combat aircraft at a civilian airport earlier this month.

President Anura Kumara Dissanayake told Sri Lanka’s parliament on Friday that Washington had requested permission for the aircraft to land at Mattala Rajapaksa International Airport in southern Sri Lanka from March 4 to 8.

The request was made on February 26, two days before the US and Israel launched their military offensive against Iran.

“They wanted to bring two warplanes armed with eight antiship missiles from a base in Djibouti”, Dissanayake told lawmakers. “We turned down the request to maintain Sri Lanka’s neutrality”, he added to applause.

The US-Israeli war on Iran has sparked widespread concern globally, as Iranian missile and drone attacks across the wider Middle East have sent energy prices soaring and fuelled fears of a widening conflict.

US President Donald Trump has also been pressuring Washington’s allies to show more support for the war, slamming NATO countries as “cowards” for refusing to help secure the Strait of Hormuz.

Iran has essentially shuttered the critical Gulf waterway amid the war, forcing leaders around the world to scramble to try to offset the effects on their economies and energy supplies.

Amid the turmoil, many countries have refused to get directly involved in the war while calling for urgent de-escalation.

On Friday, Switzerland announced that it would halt any weapons exports to the US that could be used in military operations against Iran, citing its longstanding policy of neutrality.

“The export of war materiel to countries involved ⁠in the international armed conflict with Iran cannot be authorised for the duration of the conflict”, the Swiss government said.

Sri Lanka’s president also cited his country’s neutrality in the decision to deny the US request to land the two aircraft at Matalla airport earlier this month.

Dissanayake said he had received another request that same day, on February 26, from Iran to seek permission for three naval vessels to make a goodwill visit to Sri Lanka.

“With two requests before us, the decision was clear,” he said, noting that the government denied both to avoid taking sides as signs of escalating conflict emerged.

“Had we said ‘yes’ to Iran, we would have had to say ‘yes’ to the US, as well”, Dissanayake added.

In early March, Sri Lanka’s navy rescued 32 Iranian crew off IRIS Dena after it was torpedoed by a US submarine off the country’s coast, killing at least 84 people.

Days later, Sri Lanka evacuated more than 200 crew members from a second Iranian vessel, IRIS Bushehr, after the ship requested assistance from Colombo.

[Aljazeera]