Extracts from the Central Bank of Sri Lanka report, ‘Recent Economic Developments: Highlights of 2020 and Prospects for 2021’
Continued from yesterday
* With a notable increase at the beginning of the year, prices of items in the Non-food category remained mostly unchanged during the period from April to June 2020, mainly due to the lower demand for non-essential goods and services and non-adjustment of administered prices such as transport fare, communication charges, electricity and water charges with the spread of the COVID-19 pandemic in the country. Similar to 2019, an increase in house. Rentals in Housing, Water, Electricity, Gas and other Fuels sub-category, which occupies the largest share in the Non-food category in both CPI baskets, took place in January 2020, yet at a comparatively lower magnitude. This increase at the beginning of the year was coupled with an increase in tuition fees for secondary education in the Education sub-category, and resulted in the highest increase observed in the Non-food category since January 2019. Moreover, an increase in payments to medical laboratories in the Health sub-category occurred in March 2020.
However, a decline in the same was recorded in August 2020, contributed to by the downward price revision of the Full Blood Count (FBC) laboratory test. Meanwhile, Lanka IOC (LIOC) revised petrol (92 octane) price downward from
Rs. 142 to Rs. 137 per litre from 06 April 2020, but increased back to the original price on 17 May 2020. However, LIOC reduced the price of petrol (92 octane) back to Rs. 137 with effect from 20 May 2020, tallying the price maintained by the Ceylon Petroleum Corporation (CPC). Prices of arrack, beer and cigarettes have remained unchanged thus far during the year, while prices of arecanuts and betel leaves increased significantly August 2020 onwards. Meanwhile, prices of items in the Non-food category followed an increasing trend from July 2020 onwards.
Consumer Price Indices
National Consumer Price Index
* The NCPI, which recorded 137.0 index points in January 2020, declined to 134.8 index points in April, before reaching 138.9 index points in September 2020. The increase observed in the NCPI in January 2020 was driven by the increases observed in prices of items in both Food and Non-food categories. Afterwards, the NCPI declined for two consecutive months in
March and April 2020 driven by the decrease in prices of items in the Food category. The NCPI demonstrated a reversal of its previous downward trend and increased thereafter till June 2020, while the prices of items in the Food category remained as the sole contributor towards this increasing momentum. However, the NCPI remained unchanged in both February and July 2020 since the decline of the prices of items in the Food category was nullified by the increase observed in the prices of items in the Non-food category. Further, the increase observed in the NCPI in both August and September 2020 was contributed by the increases of prices of items in the Food and Non-food categories.
Colombo Consumer Price Index
* The CCPI, which recorded 134.6 index points in January, reached 133.4 index points in March 2020 and increased to 136.3 index points in September 2020. The increase in January 2020 was supported by the movement of the prices of the items in both the Food and Non-food categories. Meanwhile, the movement of prices of items in the Food category contributedtowards the decline and the increase observed thereafter in March and April 2020, respectively.
Month-on-month increases demonstrated by the CCPI in the next three consecutive months until July 2020 and September 2020 were mainly due to the price increases of the items in both Food and Non-food categories.
* NCPI based year-on-year headline inflation remained above mid-single digit level during the period from January to September 2020.
The year-on-year headline inflation, which recorded 7.6 per cent in January, peaked at 8.1 per cent in February 2020, the highest since November 2017 and reached 6.4 per cent in September 2020. Meanwhile, NCPI based annual average inflation increased continuously from 4.1 per cent in January to 6.2 per cent in September 2020.
* CCPI based headline inflation remained mostly within the targeted range of 4-6 per cent during the period from January to September 2020. Accordingly, the year-on-year CCPI inflation increased from 5.7 per cent in January to 6.2 per cent in February 2020, moved on a declining trend afterwards until reaching 3.9 per cent in June and increased thereafter to 4.0 per cent in September 2020. Meanwhile, the annual average CCPI based inflation remained stable during the period from January to September 2020, in which it recorded 4.5 per cent in January and reached 4.7 per cent in September 2020.
* Core inflation remained at stable levels yet notably lower than that of the previous year, driven by the statistical effect of the high base which prevailed throughout the previous year owing to the significant hike in house rentals observed at the beginning of 2019. Even though an upward revision in house rental occurred in January 2020, the effect was comparatively minimal. Accordingly, amidst monthly increases, the year-on-year NCPI based core inflation moved on a decreasing trend from 3.9 per cent in January to 3.2 per cent in March and remained unchanged in April before continuously increasing to reach 4.8 per cent in September 2020. Meanwhile, CCPI based year-on-year core inflation was at 3.0 per cent in January and recorded 2.9 per cent in September 2020.
Producer Price Inflation
* The producer price inflation measured by the year-on-year change in the Producer’s Price Index (PPI, 2013 Q4*100) increased initially to 5.6 per cent in January, peaked at 7.8 per cent in July and declined to 7.7 per cent in August 2020. The year-on-year producer price inflation of all three sub-sectors, namely, agriculture, manufacturing and electricity and water supply demonstrated overall increases during the first eight months of the year, yet recording notable fluctuations in between.
PRICES, WAGES, EMPLOYMENT AND PRODUCTIVITY
* Inflation expectations of the corporate sector moved mostly within 4-6 per cent, however demonstrating mixed movements, during the period from January to September 2020, while inflation expectations of the household sector remained above the inflation expectations of the corporate sector. Short term inflation expectations of both the corporate sector and household sector remained above their longer term inflation expectations. Accordingly, disruptions to domestic production and supply chains along with containment measures taken to combat the spread of the COVID-19 pandemic, import restrictions imposed by the government, depreciation of the local currency, relaxed monetary policy stance and expected recovery in demand and economic activities with the ease of restrictions related to the COVID-19 pandemic emerged as main reasons for their high inflation expectations. Meanwhile, subdued demand and economic activities, and fall in international oil prices amidst the spread of the COVID-19 pandemic, upswing in home gardening, expected improvements in domestic production, expected relaxation of import restrictions and recovery of supply chains with the ease of the COVID-19 pandemic were cited by respondents as reasons for their low inflation expectations in the longer term.
* Nominal wages of public sector employees, as measured by the public sector wage rate index (2016*100), increased significantly by 11.1 per cent during the period from January to August 2020 compared to the same period of 2019. This increase was due to the introduction of a new non-pensionable monthly interim allowance of Rs. 2,500 with effect from
01 July 2019 to all public sector employees and the addition of final tranche of the special allowance and interim allowance to the basic salary of public sector employees, with effect from 01 January 2020. Accordingly, real wages of the public sector employees also increased by 4.3 per cent during the period from January to August 2020 compared to the corresponding period of the previous year.
* Nominal wages of the employees in the formal private sector, as measured by the minimum wage rate index (1978 December*100) of employees, whose wages are governed by the Wages Boards Trades, increased marginally by 0.2 per cent during the period from January to August 2020 compared to the same period of 2019. However, real wages of employees in the formal private sector declined by 4.4 per cent during the period from January to August 2020 compared to the corresponding period.
Top SL business leaders panelist at UN Global Compact Summit 2021
Sri Lanka co-hosts three sessions
More than 20,000 leaders from business, government, the UN, and civil society will gather for the UN’s largest corporate sustainability event to elevate ambition for strategic collective action to get back on track after the pandemic and rebuild a just, equitable and resilient society.
The United Nations Global Compact Leaders Summit on 15-16 June will convene Heads of State, CEOs of major corporations and UN leaders to address the converging global crises of climate change, the Covid-19 global pandemic, worsening social and economic inequality and unchecked corruption in order to offer a roadmap for a sustainable recovery.
Confirmed speakers include the President of Singapore, H.E. Halimah Yacob; Prime Minister of Jamaica, H.E. Andrew Holness, Prime Minister of the Republic of Korea, H.E. Kim Boo-kyum; UN Secretary-General António Guterres; UN Deputy Secretary-General Amina J. Mohammed; President of COP26, Alok Sharma; the UK’s High-Level Climate Champion Nigel Topping; Inger Andersen, Executive Director, UNEP; Michelle Bachelet, UN High Commissioner for Human Rights; Sharan Burrow, Secretary General of the International Trade Union Confederation and Sanda Ojiambo, CEO & Executive Director of the UN Global Compact.
Over 26 hours of continuous virtual programming, speakers and guests from 69 Global Compact Local Networks will discuss responsible business practices through the lens of pressing issues such as the state of sustainability; credible climate action; tackling corruption through collective action; decent work and ensuring living wages; accelerating women’s leadership and bringing innovative sustainable investment instruments to market.
The UN Global Compact Network Sri Lanka will be co-hosting three sessions. The first session, Network Sri Lanka has joined forces with Networks Mexico, United Kingdom and Turkey to host the “Responsible Business: Diversity & Inclusion in the Workplace” on the 15th June 2021 at 10.45pm to 11.30pm (IST) featuring Ms. Sharmila Sherikar, Senior Vice President – Talent Management Head – Americas Business, Virtusa.
Additionally, the second session, Network Sri Lanka will host the session titled “Sustainable Manufacturing for an Equitable Future” at the Virtual Leaders Summit, on the 16th of June 2021 from 8.15am to 9.00am (IST). Sri Lanka, as one of the fastest growing markets in the world, possesses abundant opportunities and fascinating approaches to cross-cutting the Sustainable Development Goals. Sustainable Manufacturing seeks to replace an unsustainable economic development model with socially and environmentally responsible practices that consume minimal resources. Sustainable Manufacturing involves total life-cycle considerations when developing products which are both economically sound and socially beneficial.
The panelists for the Sri Lanka Network session are Dilhan Fernando – CEO of Dilmah Tea and Chairman of the UN Global Compact Network Sri Lanka, Hajar Alafifi – Chairperson and Managing Director, Unilever Sri Lanka, Dr. Rohan Fernando – Managing Director, Aitken Spence Plantations Managements PLC and Executive Director, Aitken Spence PLC, Shakthi Ranatunga – Chief Operations Officer, MAS Holdings; Rajitha Kariyawasam – Managing Director, Haycarb PLC & Eco Solutions and Deputy Chairman, Dipped Products PLC (Hayleys Group)
Furthermore, for the third session, Network Sri Lanka has partnered with Networks Bangladesh, Nepal and Pakistan to host “Towards Economic Prosperity: Perspectives from South Asia” on the 16th June 2021 at 9.30am to 10.30am featuring Mr. Krishan Balendra, Chairman – John Keells Holdings
Other high-level Summit speakers include comedian and producer Larry Whitmore; Manish Bapta, Interim President and CEO, World Resources Institute; Can Çaka, CEO, Anadolu Efes; Li Zhenguo, Founder & President, LONGi Green Energy Technology Co; Marjorie Yang, Chairman and CEO, Esquel Group; Victoria Yarmoshchuku, CEO and Darren Walker, President of the Ford Foundation.
Please register online for the sessions via https://shor.by/chTn
Sri Lanka Insurance Shines at “Brand Finance Most Valuable Brands 2021”
Sri Lanka Insurance tops the ranking in many aspects in the recently published Brand Finance report on Sri Lanka’s Most Valuable Brands 2021 edition. Sri Lanka Insurance tops the list as The Most Loved Insurance Brand of the Year and the Most Valuable General Insurance Brand of the year. Sri Lanka Insurance is moving forward proving it’s prowess to be awarded these prestigious titles for the 4th consecutive year.
Sri Lanka Insurance was established in 1962, with the aim in taking the message of protection through Insurance to every corner of the nation, and to date the company has focused on this core element of providing protection for all.
During the year 2020 Sri Lanka Insurance has been in the forefront in aiding and supporting Covid relief initiatives. Sri Lanka Insurance donated Rs 5 Million to the Covid relief fund, donation of 10,000 number of 200 ml sanitizer bottles to the Special Task Force carrying out necessary pandemic control measures, launched Viru Abhiman – the Rs. 1.5 million worth free life cover granted to the state sector employees who are in the frontline battling Covid 19 pandemic during 2020, the donation of facemasks, hand sanitizers, surface disinfectants distributed among Municipal Councils, Provincial Councils and Town Councils and necessary government entities just before the lockdown ended giving all the assurance that their offices are risk-free places to return.
The Company also adopted easy payment schemes and concessions on premium payments to ease the customers during these trying times. Sri Lanka Insurance mandate goes beyond Insurance, It is to provide protection to the people of this nation at times of catastrophe.
Leading the General Insurance Market with a 20.3% Market share, SLIC General Category recorded a staggering Rs 20.1 Billion in Gross Written premium in 2020, an unmatchable monthly claim settlements amounting to Rs. 665 Million and a Rs 7.9 Billion per annum is undoubtedly Sri Lanka’s No 1 General Insurance brand.
AIA’s new ‘MyPos’ redefines the way agents do business
AIA Insurance has revolutionised the way agents interact with customers, through yet another breakthrough in digital innovation; Introducing the all new AIA MyPoS; a cutting-edge solution designed to give AIA Wealth Planners and Bancassurance Executives everything they need to make a sale, in a single app.
This all new MyPoS, which is based on much research and the experience of AIA’s distribution excellence across Asia has completely changed the paradigm. To start with it has introduced a much deeper needs analysis tool, which engages the customer, provides insights into their financial and insurance needs and lets AIA’s Wealth Planners and Banca Executives provide advanced life, health and protection solutions in simple, easy terms, in the new MyPos, which operates on the Android and IOS platforms. It generates insurance quotes and enables comparisons, real time, while AIA’s distribution engages with their prospective customers. The entire process from lead generation to prospecting and proposing a product has been seamlessly integrated along with an underwriting rules-based engine to enable straight through processing of a large portion of policies. In a large percentage of cases, policies that are entered through MyPos, can be issued within 24 hours with minimal human interventions, thus making the experience for the customer easy and improving the productivity of AIA’s distribution team significantly.
This is a pioneering effort in digital transformation by AIA to make the insurance business faster, easier, more precise and more efficient. D J Weeratunge one of AIA’s Business Development Managers explained, “the new MyPos has significantly reduced the time it takes to canvass new business, thereby enabling me to be far more productive than I could have imagined! My interactions with customers are much smoother now and the customers really do seem to appreciate that we respect their time and address their requirements real time.” He added, “Our main goal is to make it convenient for customers to do business with us and this new MyPos is a revolutionary tool that allows us to do just that. My experience with it has been very positive and I am happy to see AIA leverage on innovatory digital assets to enhance our customer’s experience.”
K P Sooriyarachchi, an AIA Wealth Planner said, “the new MyPos has made our lives so much easier. Everything we need when approaching a potential customer is at our fingertips in one easy to use, integrated system and it really does help us to offer personalised and customized service to our customers to best suit their needs.”
AIA’s Deputy CEO and Chief Agency Officer Upul Wijesinghe noted “this cutting-edge solution is a result of our commitment as a company to accelerate innovation and drive digital adoption while simplifying the process of insurance sales. We are constantly striving to make our internal processes faster and better and also to ensure that the customer’s buying and onboarding journey is made easier. The convergence of human and digital has the potential to transform the business of insurance and that’s exactly what this new MyPoS does. Putting this new and upgraded digital tool in the hands of our Wealth Planners empowers them to provide superlative service to our customers through a seamless sales journey across channels.”
AIA’s Chief Technology Officer Umeshi de Fonseka added “This is a world class tool, which is used in many other AIA business units and we’ve acclimatized it for the Sri Lankan market to ensure that our customers and Wealth Planners benefit from the best practices. At AIA, we believe digital transformation to be the key enabler in our quest towards being the #1 insurer in Sri Lanka. AIA’s MyPoS is the latest addition to our portfolio that uses next generation platforms with human centric design principles for ease of use. It is a fully integrated tri-lingual platform, which seamlessly integrates with the core system, workflows, documents management and payments as well the AIA customer portal. It facilitates automated underwriting, real-time analytics, dashboards to monitor progress of Wealth Planners and has advanced financial need analysers with predictive features. It also has offline functionality making it accessible to all corners of the country and has set a new and risen benchmark for the industry and simplified insurance disruption.”
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