The Central Bank of Sri Lanka today (07) presented its flagship publication, the Annual Economic Review for 2024 (AER 2024), to President and Minister of Finance, Anura Kumara Disanayake, highlighting the steady progress of Sri Lanka’s economic recovery following the country’s most severe downturn in recent history.

The report was officially handed over by Dr. P. Nandalal Weerasinghe, Governor of the Central Bank, during a special ceremony held at the Presidential Secretariat.

AER 2024 comprises four main chapters: Macroeconomic Developments, Conditions of the Financial System, Review of Central Bank’s Policies and Macroeconomic Outlook.

According to the Review, the Sri Lankan economy showed significant signs of recovery in 2024, following the deep economic crisis experienced two years ago. The recovery trajectory, though challenging, has been notably faster than that of many other debt-distressed countries.

Improvements in economic activity, a partial resurgence in purchasing power and reduced uncertainty are among the key positive indicators noted in the report.

The event was attended by Dr. Nandika Sanath Kumanayake, Secretary to the President,  K. M. Mahinda Siriwardena, Secretary to the Treasury, Mrs. K. M. A. N. Daulagala, Senior Deputy Governor, Dr. C. Amarasekara, Assistant Governor, Dr. (Mrs.) S. Jegajeevan, Director of Economic Research and Dr. L. R. C. Pathberiya and Additional Director of Economic Research at the Central Bank Dr. V. D. Wickramarachchi.

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On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka during 05^th to 14^th of April in this year.

The nearest areas of Sri Lanka over which the sun is overhead today (07^th) are Colombo, Awissawella, Talawakelle, Dimbula, Galakumbura and Dambagalla at about 12:12 noon.

Defence Secy says a decision was taken at 2023 Defence Dialogue

Contrary to claims that the MoU/agreements finalised during Indian Prime Minister Narendra Modi’s state visit here were in accordance with an understanding between former President Ranil Wickremesinghe and PM Modi in July 21, 2023, the MoU on Defence Cooperation is a new addition.

A joint statement issued on July 21, 2023, soon after the conclusion of Wickremesinghe’s visit, didn’t refer to an MoU on defence cooperation.

Premier Modi disclosed the decision to enter into an MoU on 16 Dec., 2024 at a joint press conference addressed by him and President Anura Kumara Dissanayake.

A media statement issued by the Indian High Commission in Colombo quoted the Indian PM as having said that President Dissanayake and he had agreed that the two countries’ security interests were interconnected. “We have decided to quickly finalise the Security Cooperation Agreement.”

President Dissanayake, in his address, didn’t refer to the proposed MoU on defence cooperation. The Presidential Media Division quoted President Dissanayake as having said that they exchanged views on cooperation in the fields of defence and security, power and energy, training and capacity building, education, agriculture and social security.

However, retired Air Vice Marshal Sampath Thuyakonttha, who signed the MoU on Defence Cooperation, in his capacity as the Defence Secretary, said that they had agreed to strengthen defence relations through an MoU during Defence Dialogue in 2023.

Responding to concerns expressed in some quarters about the MoU at issue, Thuyakonttha, a veteran Mi 24 helicopter gunship pilot, emphasised that the agreement on the MoU had been reached in keeping with the instructions issued by the Secretary to the President in January this year.

In addition to the MoU on Defence Cooperation, the two sides finalised six other MoUs/agreements. They dealt with Implementation of HDVC interconnection for import/export of power, cooperation in the field of sharing successful digital solutions implemented at population scale for digital transformation, multi-sectoral grant assistance for Eastern Province, cooperation in the field of health, medicine, etc.

India, Sri Lanka and UAE have agreed to develop Trincomalee as an energy hub.

Milinda Moragoda, who served as Sri Lanka’s High Commissioner in New Delhi during the August 2021-Oct 2023 period and played a critical role in negotiations, stressed the pivotal importance of going ahead with the MoU/agreements.

In response to The Island queries regarding the latest developments, Moragoda said that the progress made on the economic integration and connectivity side was extremely encouraging. Especially, the concrete steps taken to establish connectivity in power, petroleum and the development of Trincomalee as an energy hub, he said.

“The fact that trilateral cooperation between India, Sri Lanka and selected third countries will become part of our future development strategy, with the formal entry of the UAE as a partner in the Trincomalee energy hub initiative is a very important step forward.”

Moragoda said: “The establishment of a framework to share successful digital solutions between India and Sri Lanka is also another positive development.

“It is critical that both parties now focus on the speedy implementation of all the agreements that have been reached.

“Future consideration should be given to developing road and rail connectivity as well.

“We should all understand and absorb that the physical connectivity that would be established in power, petroleum and other sectors will link us directly to India, the Middle East and Europe making us potentially a key global hub at a pivotal point in world history.

“The understandings that have been reached with India could become critical for Sri Lanka’s immediate economic survival and development as we cope with the monumental disruptions taking place in the international economic environment and geopolitical sphere at the moment.

“Sri Lanka is in an extremely vulnerable position and will have to very quickly work out a survival strategy through which we can diversify our foreign income and investment sources while arriving at an understanding with the US in the short term.

“As we enter an era where geoeconomics will become more important than plain economics, the agreements reached during the visit of Prime Minister Modi could help lay an initial foundation for Sri Lanka’s future developmental direction.”

By Shamindra Ferdinando