Connect with us

Business

Treasury Secretary urges public to have a ‘pragmatic view’ of economy and fiscal discipline

Published

10 months ago

on

Mahinda Siriwardana

‘Fortunately, help came from IMF in 2022 when economy suddenly plunged into crisis’

By Sanath Nanayakkare

Mahinda Siriwardana, Secretary to the Treasury and the Ministry of Finance recently warned that any policy inconsistency in handling the economy or veering away from the current fiscal consolidation programme would lead to disaster with no hope of future bailouts for Sri Lanka.

“The Public Finance Management Bill should have been brought many years ago. How many drafts were made – how many years were spent – before it was eventually finalized? We waited till we had our ‘back hit the ground’ to bring this. Why couldn’t we bring it earlier? There are several other things also that we should have done to avoid the crisis, but we didn’t,” he said.

“I am saying this from my personal experience. When you look back at the last two years and compare it with now, we have achieved relative stability, but we are still not in a comfortable position as a country. At the Treasury we are aware that the country is in a difficult place. But that difficulty is not visible on the surface. Fuel is available, electricity is available and public and private transportation is in place. As public servants, we got our salaries because the government didn’t impose s pay cuts like in Greece during the bailout program of the International Monetary Fund. That’s a good thing. But we still pay the salaries with difficulty.

Now that money printing has been brought to an end, government revenue has to come from taxes. In addition, we are trying to restrict our spending. That is not easy. For many decades, we have been used to one method and it is very difficult to change it. With the lessons we learned from the economic crisis, now we have to think as a country. We can’t just think as political parties. I would like to tell the whole country that political parties may have different policies, but if they say things to just get political power, that’s wrong. The head of the International Monetary Fund’s mission in Sri Lanka Peter Brewer has said it is witnessing the beginning of a virtuous cycle in Sri Lanka which must be sustained rather than reverting to a ‘vicious cycle’ as the country is on a ‘knife edge’ path. That is why we need to act wisely. Now we don’t print money or make unnecessary expenditures to maintain fiscal discipline. If the country needs to shift from the current course, then the people need to be told how it would be done and its impact on the people. Otherwise the people would plunge into a more difficult place than they were in 2022.”

“Fortunately, a positive reaction came from the IMF in 2022 when we plunged into the crisis. Today the debt restructuring has been successful to some extent. The international community is watching us. If we engage in fiscal indiscipline again, if we lose our current consolidation path altogether, don’t think anyone will come and bail us out next time. This is the fragile situation we are in and we need to understand that very well.”

“A lot of pain had to be taken in the process of achieving current level of stability which was done under the guidance of the President. Now we all need to get together and move the country forward on the current track and sustain the reform momentum. Otherwise we will have to pay a heavier price in the future than in 2022 as a consequence,” he said.


Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Union Assurance records Rs. 5.2 Billion PBT, fortifying its financial position by delivering best-in-class value

Published

19 seconds ago

on

2025/04/9

By

Krishan Balendra, Chairperson, JKH and Union Assurance (L) / Senath Jayatilake, CEO, Union Assurance (R)

Union Assurance PLC, Sri Lanka’s longest-standing private Life Insurer, has recorded a strong financial performance with growth across key metrics for the year ending December 31, 2024. The Company achieved a 15% growth in gross written premium, totalling Rs. 21.6 billion driven by double-digit growth in both regular new business premiums and renewal premiums and paid Rs. 7.7 billion worth of claims and benefits to its customers during the year. In addition, for the year ending December 2024, the Company also declared an industry-leading universal life policyholder dividend rate of 12%, underscoring its continued commitment to deliver exceptional value to its customers.

Net investment income recorded a 9% year-on-year growth to reach Rs. 11.8 billion aided by an effective asset allocation strategy. The gains from the trading investment portfolio increased by 123% to reach Rs. 2.9 billion driven by the strong performance of the Colombo Stock Exchange during the latter part of the year.

Union Assurance distributed Rs. 3 billion as surplus from the policyholder fund and reported a profit after tax of Rs. 3.7 billion for 2024. The Company declared a final shareholder dividend of Rs. 5.00 per share amounting to a total payout of Rs. 2.9 billion.

A key milestone for Union Assurance in 2024 was the surpassing of Rs. 100 billion in total assets for the first time in its history, ending the year with Rs. 109.5 billion. This underscores the Company’s solid financial foundation and growth trajectory.

The Company’s assets under management grew by 15% during the year, reaching Rs. 95.6 billion driven by market valuation gains and cash generation from business operations. Furthermore, Union Assurance’s capital adequacy ratio stood at a healthy 264% at the end of 2024, well above the regulatory minimum of 120%.

Continue Reading

Business

AMF sustains growth momentum and financial resilience for nine months ended December 2024

Published

1 min ago

on

2025/04/9

By

Suren Goonewardene, Chairman, Associated Motor Finance PLC. (L) / T M A Sallay, Director/CEO, Associated Motor Finance PLC. (R)

Associated Motor Finance Company PLC (AMF) has delivered a strong performance for the nine months ended 31st December 2024. The company recorded significant profitability growth, reinforced balance sheet strength, and a strong liquidity position, demonstrating strategic agility and prudent risk management.

AMF has shown resilience despite economic challenges during the COVID-19 pandemic and the 2022 financial crisis. While the industry saw a decline in lending activity, AMF continued to grow its portfolio, strengthening capital and liquidity to ensure financial stability.

The Company achieved significant growth across key financial indicators. Profit Before Tax (PBT) increased by an impressive 133%, reaching Rs. 781 million, and Profit After Tax (PAT) recorded substantial growth of 135%, rising to Rs. 393 million.

Return on Assets (ROA) and Return on Equity (ROE), stood at 5.25% and 15.25%, respectively, and the Capital Base to Risk-Weighted Assets (Tier II) ratio reached 15.49%, exceeding the regulatory minimum requirement of 12.5% and demonstrating the Company’s profitability and further improvement.

Total assets expanded to Rs. 20.39 billion, and Loans and receivables grew to Rs. 12 billion, boasting a healthy credit portfolio and increased lending activity. Customer deposits reflected a significant growth, reaching Rs. 15.46 billion, a testament to sustained customer confidence and trust in the Company’s financial strength.

Furthermore, total equity increased by 12%, reaching Rs. 3.63 billion, and the Net Asset Value (NAV) per share stood at Rs. 32.07, reflecting consistent value creation for shareholders. These financial achievements underscore the Company’s strong foundation, prudent risk management, and commitment to delivering long-term value to stakeholders. AMF maintained strong liquidity well above industry standards, with Liquid Assets accounting for 31.54% of Total Assets and a Short-Term Liquidity Ratio of 198%, demonstrating its ability to meet immediate obligations with ease.

Continue Reading

Business

Hemas appoints Dr. Mahesha Ranasoma as Managing Director of Hemas Pharmaceuticals and Hemas Surgicals & Diagnostics to strengthen healthcare partnerships

Published

3 mins ago

on

2025/04/9

By

Hemas Pharmaceuticals and Hemas Surgicals & Diagnostics, the market leader in pharmaceutical distribution in Sri Lanka, has appointed Dr. Mahesha Ranasoma as its Managing Director, effective April 2, 2025.

For over six decades, Hemas Pharmaceuticals has played a pivotal role in strengthening Sri Lanka’s healthcare sector. Through long-standing partnerships with globally renowned healthcare principles, the company has consistently ensured access to high-quality, safe, and effective healthcare solutions across the country. As a trusted partner of all stakeholders, Hemas remains dedicated to advancing access to innovative healthcare solutions, while upholding the highest standards of quality, compliance, and ethical practice.

“As we continue to expand our leadership position in the healthcare sector, Dr. Ranasoma’s extensive experience and proven ability to lead complex operations across multiple industries will be instrumental to pivot to the future. His purpose-driven leadership style is deeply aligned with Hemas’ values and will play a vital role in strengthening our partnerships, keeping the country’s healthcare needs at the forefront, and driving sustainable, long-term growth,” said Murtaza Esufally, Chairman of Hemas Healthcare.

Dr. Ranasoma brings over 25 years of cross-sector leadership experience in both multinational and local organizations. Prior to joining Hemas Pharmaceuticals, he served as CEO of Global Rubber Industries (GRI) and as Managing Director of Dipped Products PLC under the Hayleys Group. He has also held regional leadership roles, including Country Chairman of Shell Sri Lanka and General Manager of Shell Vietnam, where he led transformational initiatives in growth, innovation, and operational excellence.

“I am honoured to join Hemas Pharmaceuticals at such a dynamic time in the healthcare industry,” said Dr. Mahesha Ranasoma. “Hemas has built a strong reputation for excellence in pharmaceutical distribution and healthcare solutions. I look forward to working with our talented team and esteemed partners to further strengthen our market leadership, enhance accessibility to quality medicines, and contribute meaningfully to the healthcare eco-system.”

Under Dr. Ranasoma’s leadership, Hemas Pharmaceuticals and Hemas Surgicals & Diagnostics will continue to be a trusted partner in delivering innovative and high-quality healthcare to all Sri Lankans.

Continue Reading

Trending