News
Developers halt new condos after currency collapse, costs skyrocket
ECONOMYNEXT –Sri Lanka’s condominium developers said they have halted new projects and building materials were skyrocketing with the collapsing rupee and import protection given to building material producers triggering a crisis in partially built apartments.
“At present no Developers are embarking on new Projects as budgeting even in the short term is impossible, the Condominium Association of Sri Lanka said in a statement.
“The stark reality though is that Developers with partially constructed properties and current Buyers [and] those who have paid deposits on “old pricing” will jointly face difficulty.
“On the one hand, exponentially increased costs preclude the adherence to previously quoted prices and on the other hand buyers facing unanticipated cost increases and hiked-up interest rates.”
Sri Lanka’s rupee collapsed and the country is trapped in the worst currency crisis in the history of the island’s Latin America style central bank.The rupee collapsed from 182 to 360 to the US dollar in the current cycle of printing money to suppress rates.
Monetary instability worsened and the central government, state enterprise and the central bank itself borrowed heavily abroad through seven years of ‘flexible inflation targeting’ with output gap targeting (printing money to boost growth) despite having a reserve collecting peg and defaulted in 2022.
Inflation officially has soared 67 percent in the year to June, with food prices doubling over two years.Price of steel has shot up 350 percent from 100,000 rupee a tonne in 2021 to 450,000 rupees now.Price of tiles has rocketed from 300 percent from 150 a square feet 600 rupees.Price of cement has increased from 800 rupees to 3100 rupees per 50kg bag or about 287 percent.Prices of some fittings are more than 500 percent the condominium developers association said.About 600,000 person are employed in the construction industry, the association said.
Central bank interest rates suppression and the resulting credit and mal-investment for output gap targeting usually hits the construction sector the hardest.Construction sector was also hit in the 2016 and 2018 interest rates suppression and currency collapse cycles, with most of the industry backing the then opposition.However the 2019 administration printed even more money and gave 7 percent loans to construction driving up imports which were financed with central bank reserves driving up imports and the interventions were sterilized leaving the banks with central bank borrowings and deteriorating loan to deposit ratios.Because reserves for imports are sterilized with re-purchased Treasury securities, ultimately monetization of budgets are blamed.
Sri Lanka has been going from one currency crises to another ever since a Latin America style central bank was set up in 1950 by US money doctor. Latin American central banks collapse default with budget surpluses.Sri Lanka’s intermediate regime central bank has taken the country to the International Monetary Fund 16 times so far. The country is now negotiating the 17 IMF deal along with debt re-structuring.
USS Canberra of the United States Navy departed the island on 14 Jun 26, following a successful replenishment port call. The Sri Lanka Navy extended a traditional naval farewell to the departing vessel at the Port of Colombo.
During the ship’s stay, the Commanding Officer of USS Canberra called on the Commander Western Naval Area at the Western Naval Command Headquarters
News
The use of local organic Agricultural products in the Bakery Industry will strengthen both local farmers and the tourism industry – PM
Prime Minister Dr. Harini Amarasuriya stated that the use of local organic agricultural products in bakery production would provide significant support to both local farmers and the growth of the tourism industry.
The Prime Minister made these remarks while addressing the Annual meeting of the All Ceylon Bakery Owners’ Association, held at the Shangri-La Hotel, Colombo, on Friday (12 June).
The Prime Minister stated,
“At a decisive moment when the country is moving towards a new phase of economic transformation, I believe that the bakery industry has the potential to become a key driver of the national economy, rather than remaining limited to flour-based products alone.
The food production must be mainly considered the quality and safety of food. Therefore, instead of focusing solely on taste, we should introduce nutritious and healthy products to the market that are free from artificial flavourings and colourings.
By using ingredients such as rice flour, finger millet, foxtail millet, green gram, and indigenous tubers to create value-added products, the bakery industry has the opportunity to capitalize on the growing global trend towards health-conscious diets.
The use of local organic agricultural products in food prepared for foreign tourists will provide substantial benefits to local farmers while also contributing to the growth of the tourism industry. At the same time, the government remains committed to strengthening local entrepreneurs by reducing challenges related to the importation of raw materials, providing concessionary loans for new technologies, and offering the technical assistance required to meet international standards.
The government has already launched programmes through the Ministry of Industries to provide the necessary training and market linkages to help small and medium-scale bakery owners develop and expand their businesses”.
The occasion was attended by the Deputy Minister of Industries Chathuranga Abeysinghe, President of the All Ceylon Bakery Owners’ Association N.K. Jayawardana, and a number of members of the Association were also present at the event.
Prime Minister’s Media Division
Prime Minister Dr. Harini Amarasuriya met with a delegation from the UNICEF on Friday (June 12) at Temple Trees to discuss ongoing efforts to support the recovery of the education sector following the impact of Cyclone Ditwah.
Discussions focused on the implementation of activities outlined in the report titled “Cyclone Ditwah Education Emergency Response Plan: Phase 1 Progress Updates (January–April 2026).” The meeting provided an opportunity to review the progress achieved during the initial phase of the response and to discuss future interventions aimed at supporting children and schools affected by the disaster.
The Prime Minister and the UNICEF delegation also exchanged views on strengthening collaboration to ensure the continuity of education and the well-being of affected children.
The UNICEF delegation included Emma Brigham, UNICEF Representative, Begona Arellano, Deputy Representative, and other UNICEF officials.
(Prime Minister’s Media Division)
USS Canberra departs Colombo
The use of local organic Agricultural products in the Bakery Industry will strengthen both local farmers and the tourism industry – PM
Prime Minister meets with UNICEF delegation
Qatar net late against Switzerland to secure historic first World Cup point
Australia stun Turkiye 2-0 in counterattacking masterclass
Five Indian air force staff killed as transport plane crashes in Assam
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
#SundayIsland 17th December – Headlines
Sunday Island – 28th March
Sunday Island Headlines – 21 March
Sunday Island – 21st February – Headlines
-
Editorial7 days agoProbe Sallay’s complaint
-
News3 days agoCIABOC summons Yoshitha over his participation in British Navy training programme
-
News5 days agoLocal firms move millions of dollars overseas for phantom imports: Govt.
-
Midweek Review5 days agoJuly 09: An inexcusable overall security failure and exceptional contingency plan
-
Opinion6 days agoCould Sri Lanka once again face an economic crisis similar to 2022?
-
News5 days agoAI raises concerns over arrest of Sallay and rapper under PTA
-
News6 days agoSallay refuses to end hunger strike unless probe is taken out of CID led by Shani
-
Latest News6 days agoIran and Israel say they will pause strikes but warn of retaliation if ceasefire breached again