News

Central Bank expects economy to contract in second half of 2022 as well

Published

3 years ago

2022/10/7

The Sri Lankan economy is expected to contract in the second half of 2022 as well, the Central Bank of Sri Lanka (CBSL) has said in a statement.

“As per the GDP estimates published by the Department of Census and Statistics (DCS), the real economy is estimated to have contracted by 4.8 per cent in the first half of 2022, on a year-on- year basis,” the CBSL said.

The country is continuing to be impacted by tighter monetary and fiscal conditions, continuation of supply-side constraints and uncertainty surrounding the business environment amidst shortages of foreign exchange in the domestic foreign exchange market, CBSL said.

“However, a recovery in economic activity is expected in 2023 with the envisaged improvements in the supply-side, along with the timely implementation of the required reforms,” the CBSL said.

Given the current economic situation, the CBSL decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) at their current levels of 14.50 per cent and 15.50 per cent, respectively.

CBSL announced on Thursday that they arrived at this decision after considering the latest macroeconomic conditions, expected developments and macroeconomic projections.CBSL said that they noted the present tight monetary conditions, the reducing pace of inflation, and both domestic and global factors have helped the country stabilize.

The current fiscal policies are complementing the monetary policy and are helping to mitigate any build-up of aggregate demand pressures, the Bank said.CBSL expects the country’s headline inflation to drop to 4 to 6 per cent over the medium term. The CBSL added that market interest rates are continuously adjusting upwards reflecting the tight liquidity conditions in the domestic money market and the further monetary policy tightening measures introduced thus far.

“With relatively high deposit interest rates offered by licensed banks, a return of currency in circulation to the banking system is also observed. In August 2022, outstanding credit extended to the private sector by commercial banks contracted for the third consecutive month in absolute terms, reflecting the impact of increased effective market lending interest rates, a moderation of economic activity, and measures to curtail non-urgent imports,” CBSL said.

Meanwhile, the current declining trend in the year-on-year growth of credit to the private sector is expected to continue during the remainder of the year, while a similar trend is expected in the growth of broad money (M2b) supply as well. Meanwhile, the need for further monetary financing is expected to reduce gradually, supported by the envisaged fiscal consolidation measures and planned reforms of major state owned business enterprises.

CBSL added that the headline inflation, based on the Colombo Consumer Price Index (CCPI), increased in September 2022, driven mainly by the recent revision of electricity and water tariffs and the increase in Value Added Tax (VAT).

“However, headline inflation is expected to follow a disinflation path in the period ahead. Subdued aggregate demand pressures resulting from tight monetary and fiscal conditions, expected improvements in domestic supply conditions, normalisation in global food and other commodity prices, and the timely pass through of such reductions to domestic prices, along with the favourable statistical base effect, will be instrumental in bringing down inflation over the medium term,” it said.

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Development Officers threaten to intensify their protest

Published

2 hours ago

2026/02/2

Thilina Walpola

Protesting Development Officers continued their hunger strike near the Presidential Secretariat, Colombo yesterday (01), for the seventh consecutive day.The protesters, who are members of the Lanka School Development Officers’ Association, are demanding that they be absorbed into the teacher service as they have served as teachers in state-run schools for nearly seven years.

Secretary of the Association, Viraj Manaranga, said the protesters were seeking an urgent meeting with the President. He added that a presidential aide had visited the protest site and offered to arrange for a meeting with the President on 03 Feb., but the union insisted on an earlier date. Manaranga warned that failure to grant a meeting could trigger a massive protest in Colombo today (02).

Four officers participating in the hunger strike have been hospitalised due to deteriorating health, while two more joined the fast on Saturday (31).

In a bid to raise awareness of their grievances, on 30 January a delegation of the All Island Development Officers’ Association visited Most Venerable

Warakagoda Sri Gnanarathana Thera, Mahanayake of the Asgiriya Chapter, and subsequently with the Chapter’s Registrar, Ven. Dr. Medagama Dhammananda Thera. The prelates said promises that had been made to them should be fulfilled.

The protest began on 26 January as a satyagraha, after authorities failed to respond to repeated requests to integrate the officers into the teaching service. The escalation into a fast-unto-death underscores the protesters’ frustration over the prolonged delay

by Pradeep Prasanna Samarakoon

News

Auditor General to be appointed tomorrow

Published

2 hours ago

2026/02/2

Thilina Walpola

Bimal

The long-vacant post of Auditor General would be filled on 03 Feb., after months of controversy and delays, Minister of Transport, Highways and Urban Development Bimal Rathnayake said on Friday (31) in Kandy.

The Constitutional Council met at the Parliamentary complex on Friday to discuss the appointment but failed to reach a decision on a suitable candidate. The President had previously proposed four names on four separate occasions, all of which were rejected. The Council is now set to consider the fifth nominee.

The post has remained vacant since April 2025, following the retirement of Chulanta Wickramaratne, who served as the 41st Auditor General. More than 10 months have passed without a permanent appointment.

Sources said a female officer in the Auditor General’s Department has been nominated again, though her previous recommendation was rejected due to some allegations against her.

Meanwhile, senior audit officer Dharmapala Gammanpila, with 31 years of service and the department’s most senior official, has received backing from the Mahanayake Theras of the three Nikayas, the Maha Sangha, and several civil society groups for appointment as the 42nd Auditor General.

Sources noted that the three civil society representatives on the Constitutional Council will play a crucial role in the final decision.

by Chaminda Silva and SK Samaranayake

News

Two arrested for aiding and abetting murder

Published

2 hours ago

2026/02/2

Thilina Walpola

Two 18-year-old youth were arrested by the Southern Division of the Western Province Crime Division on 31 January for allegedly aiding and abetting two murders carried out in Dehiwala and Kohuwala. ICE (crystal meth) was found in their possession at the time of arrest.

The suspects are residents of Mount Lavinia and Boralesgamuwa, according to the police. They are accused of having helped carry out a murder at a hotel in the Dehiwala Police Division on 9 January, 2026, and an attack on a person travelling in a three-wheeler at Bodhiyawatta, Kohuwala, on 12 December, 2025.

Police said the charges included sending photographs of the victims to a criminal living overseas.

Investigations revealed that the youth had acted under the direction of a criminal known as Sando.

Under the guidance of Janaka Kumara, Director of the Southern Division of the Western Province Crime Division, investigations are being led by Police Inspector Hemanta Kumara, assisted by Sub-Inspectors Prasanna Gunathilaka and Prasanna (40248), and Constables Chaminda (72987), Anil (79598), Kumar (88762), and Senanayake (19363), who are continuing the probe.

by Norman Palihawadane and Chaminda Silva