News
Lanka past worst of its crisis but behind in growth -WB
Output growth of South Asian countries, except Sri Lanka, is projected to remain stronger than in other regions of the world in the coming years, as per the World Bank’s latest South Asia Development Update, ‘Toward Faster, Cleaner Growth’.
Growth in the region is stronger than elsewhere in the world, but it is nonetheless not strong enough for Sri Lanka to reach high-income status within a generation, the report says.
At just under 6 percent, output growth in South Asia is expected to remain stronger than in other regions in 2023-25, even with weak growth in the countries recovering from recent balance of payments crises.
While other economies in the region are growing fast Afghanistan, Pakistan and Sri Lanka are in acute crisis
Sri Lanka has continued to suffer from the aftermaths of recent balance-of-payments crises. It has recently begun to implement IMF-supported policy programmes to stem capital outflows and improve debt sustainability. Activity has continued to be hampered by input shortages related partly to higher import costs and supply disruptions associated with remaining import restrictions as fiscal deficits remain large, while current account deficits have improved amid sharp import compressions.
Sri Lanka’s economy has suffered the most severe contraction but appears to be past the worst of its crisis, with shortages of essential inputs easing and tourism recovering. The services PMI (Purchasing Managers Index) has been in expansionary territory since May 2023. Industrial production has been contracting since late 2021, but more slowly recently.
In Sri Lanka, inflation peaked around 70 percent year-on-year in September 2022 but has since slowed sharply as the effects of last year’s currency depreciation have faded. Unlike other central banks in the region, the Central Bank of Sri Lanka has been cutting its policy rates since June, in response to steep disinflation and economic contraction.
Among the south Asian nations, financial stresses were most severe in Pakistan and Sri Lanka. In Pakistan, the rupee depreciated sharply between early 2022 and early 2023, and has been broadly stable since. Last year’s attempts to limit capital outflows through import and capital controls diverted remittance inflows from formal channels, contributing to shortages of foreign currency. In Sri Lanka, the rupee has appreciated modestly since the beginning of the year, partially reversing last year’s depreciation of more than 40 percent against the U.S. dollar. Remittances have rebounded as the economy has stabilized, although they remain well below 2019 levels. There has also been a recovery in tourism earnings. In both Pakistan and Sri Lanka, foreign reserve coverage is low, asset quality is weak in both the bank and non-bank financial sectors, and buffers against future shocks are thin.
“In Sri Lanka, the economy appears to have bottomed out after its severe recession and is showing signs of recovery. Support from the IMF and other external lenders has helped stabilize the currency and ease import shortages. The economy is also being supported by the recovery of tourism. After contracting by 3.8 percent in 2023, the economy is expected to grow by 1.7 percent in 2024 and 2.4 percent in 2025. The country’s path to recovery is very narrow, however. Its limited fiscal and reserve buffers leave little room for error as it implements a broad set of reforms and restructures its external debt,” the report says.
Opposition and SJB Leader Sajith Premadasa has alleged that the current government is attempting to suppress freedom of expression and media freedom to lead the country towards authoritarian rule.
In a video message on Thursday (25), Premadasa said that in a democratic country, the four main pillars safeguarding democracy are the legislature, the executive, the judiciary, and the independent media, but, at present, the government is using the police to violate both the democratic rights of the people and the rights of police officers themselves.
He said that the government is working to establish a police state that deprives citizens of their right to access truthful information.
“For democracy to be protected, media freedom must be safeguarded, and space must be given to independent media. Instead, the government is interfering with the independent media process, using the police to suppress and intimidate independent media,” he said.
He noted that even when independent media present their views based on reason, facts, and evidence, the government attempts to suppress them. Such actions, he said, amount to turning a democratic country into a police state. “Do not suppress the voice of the silent majority, the independent media,” he urged.
Premadasa emphasised that independent media represent the voice of the silent majority in the country and must not be suppressed.
“Media repression is a step towards authoritarian rule, and the people did not give their mandate to create an authoritarian regime or a police state. If the government attempts to abolish democratic rights, the Samagi Jana Balawegaya will stand as the opposition against it,” he said.
The Opposition Leader further alleged that the government was interfering with police independence, stating, “Political interference has undermined the independence of the police, making it impossible for them to serve impartially. Suppressing freedom of expression is an attempt to lead the country towards authoritarian rule.”
Premadasa pointed out that the media has the right to reveal the truth, and interfering with that right is a violation of the rights of 22 million citizens.
Vegetable prices at the Peliyagoda Manning Wholesale Market surged to unusually high levels yesterday (26), raising concerns among consumers as the festive season drives up demand. The situation is expected to persist over the next few days, a spokesman for the Manning Market told The Island.
He said a sharp increase in the number of buyers visiting the wholesale market, ahead of upcoming festivities, had resulted in a sudden spike in demand, prompting wholesale traders to raise prices significantly. The price hikes have affected a wide range of commonly consumed vegetables, placing additional pressure on household budgets.
According to market sources, the wholesale price of beans climbed to Rs. 1,100 per kilogram, while capsicum soared to Rs. 2,000 per kilogram. Green chillies were selling at around Rs. 1,600 per kilogram. Prices of other vegetables, including beetroot, brinjal (eggplant), tomatoes, bitter gourd, snake gourd and knolkhol, also recorded unusually high increases.
The spokesman alleged that despite the steep rise in prices, vegetable farmers have not benefited from the increases. Instead, he claimed that a group of traders, who effectively control operations at the wholesale market, are arbitrarily inflating prices to maximise profits.
He warned that if the relevant authorities fail to intervene promptly to curb these practices, vegetable prices could escalate further during the peak festive period. Such a trend, he said, would disproportionately benefit a small group of middlemen while leaving consumers to bear the brunt of higher food costs.
By Kamal Bogoda ✍️
The Hakgala National Botanical Garden, which was closed in the aftermath of Cyclone Ditwah, has been reopened to tourists from yesterday, the Ministry of Environment indicated.
The Ministry said the reopening was carried out in accordance with recommendations and guidelines issued by the National Building Research Organisation (NBRO) and the DisasterManagement Centre (DMC) after safety assessments were completed.
However, due to the identification of hazardous ground conditions, several areas, within the garden, have been temporarily restricted. These include the pond area, near the main entrance, and access roads leading towards the forest park where potential risks were observed. Warning signs have been installed to prevent visitors from entering these zones.
To ensure the safety and convenience of both local and foreign visitors, the garden’s management has introduced a special assistance programme, with staff deployed to guide and support tourists.
The Hakgala Botanical Garden was closed as a precautionary measure during the disaster situation triggered by Cyclone Ditwah. The Ministry noted that the garden has now been safely reopened, within a short period, following remedial measures and inspections, allowing visitors to resume access while maintaining necessary safety precautions.
By Sujeewa Thathsara ✍️
A few showers may occur in the Northern, Eastern and Uva provinces and in Polonnaruwa, Matale and Nuwara-Eliya districts
Sajith warns country is being dragged into authoritarian rule
Wholesale mafia blamed for unusually high vegetable prices
Cyclone-damaged Hakgala Botanical Garden reopened with safety measures
Holiday travellers generate record revenue for expressways
Another casualty from underworld warfare succumbs to his injuries
‘Dates have the highest sugar content to fight Coronavirus’
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