By Hiran H.Senewiratne
Sri Lanka’s 2021 GDP growth prospects seem positive despite the economy contracting by 1.7 per cent and 16.3 per cent in the first and second quarters of 2020. However, the economy rebounded in the third quarter of 2020 and registered a growth of 1.5 per cent, Central Bank Governor Prof. W. D.Lakshman said.
“However, the second wave of COVID-19 is expected to have dampened the momentum in the fourth quarter of 2020. Accordingly, the economy is expected to have contracted by around 3.9 per cent in 2020, Central Bank Governor said while releasing the CBSL monetary policy review yesterday.
“Nevertheless, the economy is well poised to rebound in 2021, supported by the unprecedented policy stimulus measures introduced by the government and the Central Bank, improved domestic economic sentiments, alongside the improving prospects of the global economy, Lakshman told the media online.
He said the Monetary Board has decided to continue with its accommodative monetary policy stance.
Headline inflation is projected to remain subdued in the near term and improvements in domestic supply conditions are expected to ease price pressures on a sustained basis.
The Central Bank Governor also said the CBSL will continue to monitor domestic and global macroeconomic and financial market developments and take further measures appropriately to ensure that the economy promptly reverts to its true potential of a high growth trajectory, while maintaining inflation in the targeted 4-6 per cent range under its flexible inflation targeting framework.
Accordingly, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on January 18, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 percent and 5.50 percent, respectively.
The Board arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts, Governor Lakshman said.
“The Board, having noted the reduction in overall market lending rates during 2020, stressed the need for a continued downward adjustment in lending rates to boost economic growth in the absence of demand driven inflationary pressures, particularly considering the significant levels of excess liquidity prevailing in the domestic money market, Lakshman explained.
As announced in November 2020, the Board decided to introduce priority sector lending targets for the micro, small and medium scale enterprises (MSME) sector to support a broad-based economic revival, in consultation with the banking community.
‘Sri Lanka’s gross domestic product is projected to grow 6.0 percent in 2021, recovering from a 3.9 percent slump in 2020, Central Bank’s Director of Economic Research Chandranath Amarasekara said.
‘We now expect the economy to record a growth of 6 percent, Amarasekara told the media.
CBSL and IFC launch National Financial Inclusion Strategy
Sri Lanka’s first National Financial Inclusion Strategy (NFIS) aunched recently, aims to make financial services more accessible, efficient, and affordable for all households and businesses in the country.
The NFIS is a joint effort led by the Central Bank of Sri Lanka—with technical and financial assistance from IFC, a member of the World Bank Group—under the IFC-DFAT Women in Work program. The development of this strategy was a multi-stakeholder effort supported by the government of Sri Lanka.
“The National Financial Inclusion Strategy symbolizes our country’s commitment towards a better and inclusive Sri Lanka that will benefit all individuals and enterprises. I believe this strategy will complement the Government’s efforts to minimize the provincial income disparities, urban-rural inequalities, and to promote inclusive growth,” said Mahinda Rajapaksa, Prime Minister of Sri Lanka.
“More importantly, this strategy prioritizes future generations, having identified financial literacy as a key pillar. The proposal to strengthen the national curriculum in this area is a positive step. Investing in the education of our younger generation is the most significant investment we can make as a nation, as this will be a particularly helpful approach to the systematic correction of the financial habits of Sri Lankans,” the Prime Minister said.
HNB – Havelock City partnership offers exclusive Ezy Pay Home Loans facility
HNB PLC has partnered with Havelock City mixed-use development project to offer prospective homeowners of state-ofthe-art luxury apartments in Stratford and Melford Towers (Phase 3 – COC certified) and Peterson and Edmonton Towers (Phase 4) with the exclusive Ezy Pay Home Loans facility.
The partnership is set to offer customers the unprecedented opportunity to make a payment of only 20% and immediately occupy the limited units available in Phase 3 of the project or invest in apartments available in Phase 4, scheduled to be completed by May 2021. Further, Havelock City will take on the customer’s interest payment for one year.
“We have witnessed an increase in the demand for apartments and are aware that there is a limited stock of units available in the heart of Colombo. Therefore, we hope that this partnership with Havelock City will offer our customers looking to invest in a home of their own the facility to either move into an apartment immediately or invest in a home of their dreams,” HNB Head of Personal Financial Services, Kanchana Karunagama said.
Prospective homeowners can make use the bank’s flexible repayment options, such as the Step-up facility, which offers a repayment option in line with the customers evolving income. Customers can also obtain a maximum repayment period of 25 years for the loan facility for an attractive interest rate starting from just 7%.
DPL lends a hand to children in Monaragala Rubber Farming Communities
As part of its ongoing efforts to empower and uplift the livelihood of its farmer co-operative societies, Dipped Products PLC (DPL) distributed school bags to the children of 1,500 smallholder rubber farmers for the 10th consecutive year, under its flagship Firstlight CSR project.
This year’s distribution recorded the largest donation of school bags, which was nearly a two-fold increase from the previous year, bringing the total value of the distribution up to nearly Rs. 1 million.
Taking place at the Pinwatta Bodimalu Viharaya in Medagama, Monaragala, this latest distribution marks the Company’s continued efforts to support the smallholder rubber farming communities, by ensuring that their essential needs are looked after.
“Especially in this time of economic uncertainty, with the nation facing significant challenges and hardships, it is truly touching to see the positive impact which we continue to have on the underprivileged smallholder rubber farming communities. We believe that programmes like Firstlight hold the key to enhancing the livelihoods of our 1500-strong rubber farmers, providing them with an improved quality of life, whilst paving the way to open up new opportunities and a brighter future. This is why, with the enthusiastic response we have received over the years, we have now also expanded this school bag distribution to include the District of Kegalle,” Dipped Products Deputy Managing Director, Pushpika Janadheera said.
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