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CBSL Chief: Economy could be stabilised in year or so if …
By Hiran H. Senewiratne
The prevailing Balance of Payments (BoP) crisis could lead to a major social crisis as the available foreign reserves were only sufficient for a few weeks’ imports, Governor of the Central Bank Dr. Nandalal Weerasinghe warned on Monday.
“The economy can be stabilised in the next 12 month if the IMF negotiations and debt restructuring are finalised within the next seven to eight months. Until then we have to support the poor people,” Dr. Weerasinghe said, addressing a seminar on the “State of the Economy and Talks with the IMF”. It was organised by the Press Club, together with the Press Institute, at Colombo Hilton.
The CB Governor said the current BoP crisis would worsen and, therefore the economic pain could only be minimised if essential policies and measures were implemented in an expeditious manner. But “IMF technical level virtual meetings are likely to conclude this week, and thereafter further discussion will take place to finalise everything,” Dr. Weerasinghe said.
Dr. Weerasinghe suggested that the monetary and fiscal authorities tighten the monetary policy by higher margins and fiscal policy by restoring tax rates to pre-2020 levels.
The Governor said, “We have three categories of creditors namely International Sovereign Bonds, which raise short term funds from global markets, which account for 35 percent of the government debt, while other two creditors are Paris Club and non-Paris Club (India and China).
Dr. Weerasinghe said that the country’s debt needed to be brought to a sustainable level. “For that purpose a debt sustainability analysis needs to be drafted with a fiscal policy for the IMF bailout”, he said.
Speaking about the country’s worsening economic fundamentals, Dr. Weerasinghe said: “The nation is currently experiencing a historically low economic growth and falling trend of per capita GDP since 2017 with rising levels of poverty. It is also running the highest fiscal deficits since 1988 with the lowest ever government revenue as a percent of GDP.
“Amid those developments Sri Lanka’ poverty level will increase, unemployment level soar and local industries will have to shut down due to restriction of importation of raw material. Therefore, we have to seek humanitarian assistance from the World Bank, Asian Development Bank and other bilateral and multilateral agencies”, the Governor said.
“We are seeking short-term bridging facilities from official creditors until an agreement is reached with creditors on restructuring,” he said.
In his presentation, Dr. Weerasinghe analysed the links between banking and the currency crises. He pointed out that the problems in the banking sector typically precede a currency crisis with the currency crisis deepening the banking crisis, thus activating a vicious spiral.
Sri Lanka also had the highest-ever government debt which was unsustainable at the moment. Debt dynamics might be worsening in the next few years unless the debt was restructured, he said.
Sri Lanka also recorded the highest rate of inflation in 12 years which was increasing sharply and was experiencing the highest-ever levels of money printing by the CBSL, he added
The Secretary to the President, Dr. Nandika Sanath Kumanayake stated that the government has taken a policy decision to continue, without interruption, “School Nutrition Programme’’ aimed at reducing anemia among schoolchildren, which is being implemented with the assistance of the World Food Programme.
He made these remarks on Wednesday (23), during a discussion held at the Presidential Secretariat with representatives from relevant Ministries and government institutions involved in the programme, along with officials from the World Food Programme, the Bill and Melinda Gates Foundation and the Pathfinder Foundation.
The school meal programme, aligned with the government’s initiative to provide nutritious lunch to primary school students in districts identified as having high levels of malnutrition, specifically targets the reduction of iron deficiency among schoolchildren. The initiative is jointly coordinated by the Ministry of Education, Higher Education and Vocational Education, the Ministry of Health and Mass Media, Provincial Councils, the Food Promotion Board and the Partnership Secretariat for the World Food Programme Cooperation. The government has allocated Rs. 32 billion for this programme for the current year.
A pilot project is currently being implemented in four selected districts. Based on a formal health and nutrition study assessing the outcomes of this pilot project, there are plans to expand the programme island-wide. The study aims to determine the extent to which iron deficiency among schoolchildren can be reduced through this initiative.
As part of the programme, fortified rice enriched with iron and folic acid will be included in the school meals to specifically address anemia among students.
The World Food Programme, the Bill and Melinda Gates Foundation, the Gateway Foundation and the Pathfinder Foundation have pledged their continued support for this effort.
Present at the occasion were Secretary to the Prime Minister Pradeep Saputhanthri, Senior Additional Secretary to the President Kapila Janaka Bandara, Secretary to the Ministry of Education Nalaka Kaluwewa, Secretary to the Ministry of Health and Mass Media Dr. Anil Jasinghe, and Secretary to the Ministry of Rural Development, Social Security and Community Empowerment Malarmathy Gangatharan, along with other government officials and representatives from partner organizations.
[PMD]
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Heat index at ‘Caution level’ at some places in Northern, North-central and Eastern provinces and Monaragala, Hambantota districts
Warm Weather Advisory
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 3.30 p.m. 23 April 2025, valid for 24 April 2025
The public are warned that the Heat index, the temperature felt on human body is likely to increase up to ‘Caution level’ at some places in Northern, North-central and Eastern provinces and Monaragala, Hambantota districts
The Heat Index Forecast is calculated by using relative humidity and maximum temperature and this is the condition that is felt on your body. This is not the forecast of maximum temperature. It is generated by the Department of Meteorology for the next day period and prepared by using global numerical weather prediction model data.
Effect of the heat index on human body is mentioned in the above table and it is prepared on the advice of the Ministry of Health and Indigenous Medical Services.
ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated. Dress: Wear lightweight and white or light-colored clothing.
Note:
In addition, please refer to advisories issued by the Disaster Preparedness & Response Division, Ministry of Health in this regard as well. For further clarifications please contact 011-7446491.
Retired SSP Shani Abeysekera, serving the Police Department again, has been appointed to the committee headed by Senior DIG Asanka Karawita, tasked with studying the Presidential Commission of Inquiry (PCoI) report on the 2019 Easter Sunday carnage.
The other members of the team are DIG, CID, Director, CID and Director Terrorism Investigation Division (TID)
Pivithuru Hela Urumaya (PHU) leader Udaya Gammanpila yesterday said that Abeysekera had been one of the law enforcement officers whose conduct raised eyebrows over the years as regards the failure on the part of the CID to thwart the Easter Sunday attacks.
The National Police Commission approved the reappointment of SSP Abeysekera on contractual basis for one year, with effect from 10 Oct., 2024.
Abeysekera backed Anura Kumara Dissanayake’s presidential election campaign as a member of the retired police collective.
“School Nutrition Programme’’to continue, without interruption
Heat index at ‘Caution level’ at some places in Northern, North-central and Eastern provinces and Monaragala, Hambantota districts
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