Connect with us

Latest News

Economic stabilization process and relief packages to people to continue

Published

on

A press briefing on the economic stabilization process and the proposed relief packages for the public was held on Thursday (26) at the Presidential Media Center (PMC).

Minister of Labor and Deputy Minister of Economic Development, Dr. Anil Jayantha Fernando, along with Deputy Minister of Finance and Planning, Dr. Harshana Suriyapperuma, attended the briefing.

The media statement released during the press briefing is as follows:

Press Statement on the Economic Stabilization Process and Relief Packages to people.

1. Economic Stabilization
Economic stabilization is key to take the country out of abyss created by past regimes. At the time the government assumed office those who are responsible for the crisis had unilaterally suspended external debt servicing in April 2022, entered into IMF program for Extended fund facility (EFF) of approximately USD 3 billion over a period of 4 years to be received in 8 installments, and paddled through the IMF program and debt restructuring process in line with debt sustainability analysis connected to it. The delayed and complex nature of the debt restructuring process incurred additional costs to the country and created additional burden on the people. However after, considering both pros and cons of the context prevailed at that time in terms of social, political and economic perspective, the government proceeded with the options in the best interest of the people of the country.

Accordingly, it was possible to reach the staff-level agreement of the third review on 26th November 2024, in line with the program parameters, and government revenue measures with appropriate engagement, and timely facilitation. In the lead-up to the board approval from the IMF, the government is engaging with necessary stakeholders to obtain the next tranche of the EFF.

Debt Restructuring
It consists of both domestic and external restructuring. Domestic debt restructuring was completed in July 2023. External restructuring excludes multilateral creditors on various ground and arguments. The rest consists of official bilateral debt and private ISB holders.

Bilateral Debt
The bilateral debt is dealt with the Official Creditor Committee (OCC) co-chaired by France, India and Japan representing 17 countries, China Exim Bank, China Development bank, other official creditors (Kuwait, Saudi Arabia, Iran and Pakistan) and other commercial creditors.

OCC had agreed to the terms and conditions in June 2024 and the loans with China Exim bank had already been restructured in October 2023 within the agreed framework, ensuring comparability of treatment (CoT). Except the other official creditors (Kuwait, Saudi Arabia, Iran and Pakistan) accounting roughly USD 300 million representing about 1% total external debt subject restructuring , all other bilateral creditors have already agreed for restructuring within the agreed framework.

ISB Creditors
Much delayed ISB restructuring had passed several stages of negotiations with agreements, disagreements, changes to proposals, adjustments in line with DSA and IMF consents, had finally agreed in principle (AIP) on 19 September 2024 just two days prior to the presidential election. Ad Hoc Group (AHG) and Local banking consortium represent ISBs which account for USD 14.2 billion including a past due interest of USD 1.7 billion.

By prioritizing and facilitating actions in a timely manner, the new government has demonstrated a strong political commitment to steering the country toward economic stability. These efforts toward financial stability have been independently acknowledged by third parties, including rating agencies which have upgraded the ratings by several notches, which was only possible due to the correct prioritization and implementation of economic stabilization measures. Hence, the government continued with the restructuring process and facilitated it to ensure the successful completion of the issuance of new bonds for the exchange of existing ones on 20th December 2024 in order to achieve the critical objective of stabilizing the economy in pursue of navigating the country with the growth and development trajectory towards a thriving nation and beautiful life.

2. SME Sector Facilitation

2.a.1. Parate Extension
Instead of merely postponing the Parate execution date, the government engaged with stakeholder groups to ensure acceptable solutions was found for this long-standing issue. As a result, the Parate execution has now been extended until 31st March 2025.

2.a.2. Relief Package
The relief for businesses is not only in the form of an extension of time. Based on data provided by the Central Bank, 99% of borrowers with outstanding capital of less than 25 million rupees in restructured loans have been granted a 12-month extension to renegotiate with banks and agree on a settlement path. Borrowers with debts between 25,000,000 and 50,000,000 rupees have been granted a 9-month extension, while all other borrowers are entitled to a 6-month extension. This relief package, proposed by the government and to be implemented through the Central Bank, also includes several other important measures, such as easing the credit rating status, extending the repayment period, offering low interest rates for restructured debt, and providing a transparent mechanism to resolve valuation disputes.

This package aims to ensure that the SME sector can actively contribute to the economy.

2.b. School Stationery Assistance for School Children

2.b.1. Children in the Aswesuma Families
To ease the burden on parents from vulnerable groups in society, Rs. 6,000 per child has been allocated to purchase essential school books and stationery for the upcoming school term. Children from Aswesuma recipient families will begin receiving this benefit shortly.

2.b.2. Children Not Receiving Aswesuma
Children from families who are not currently receiving Aswesuma but are facing economic hardship will also be provided with this benefit, based on recommendations from the Ministry of Education. It is expected that the process will be finalized soon, and the disbursement scheme will start within a few days, ensuring that all deserving children facing economic hardship receive assistance.

[PMD]



Continue Reading
Click to comment

Leave a Reply

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

Latest News

Action beyond dialogue is essential in addressing Green Financing and climate change. – Prime Minister

Published

on

By

There have been numerous discussions and dialogues successfully conducted across various sectors, but it is now crucial to move beyond conversation and focus on strengthening the implementation. Such collaborative effort like GGGI initiates in leading Sri Lanka towards a resilient and sustainable finance.

The Prime Minister made these remarks while attending the Sri Lanka climate finance awareness session on advancing sustainable finance and carbon markets for climate action held today (30) at hotel Marriott Bonvoy in Colombo City Center.

The awareness session was organized by the Prime Minister’s Office with the collaboration of the ministry of Environment and Global Green Growth Institute (GGGI) to create awareness of Green finance strategies leading to new initiatives for sustainable Sri Lanka.

Delivering the keynote address, Prime Minister Dr. Harini Amarasuriya stated that this session is intended to support the line ministries in better understanding how these financing mechanisms work and how they could be leveraged to implement the sustainable development priorities.

Addressing the event, the Prime Minister further stated:

“Sri Lanka has developed and updated numerous environmental frameworks to address the growing challenge of climate change, that has become the current development challenge that continues to affect lives, livelihoods, and our overall trajectory as a nation.

In Sri Lanka, key sectors such as agriculture, fisheries, energy, tourism, and water are increasingly exposed to climate-related disruptions, threatening both livelihoods and macroeconomic stability. To prevent this trajectory, we must leverage a full spectrum of international climate finance instruments.

Sri Lanka has a solid policy foundation, political will, and the institutional capacity to lead on climate action. What we now need is the financial architecture to match this ambition. Hence, today’s session represents a step toward building shared awareness and technical capacity across the public sector”.

The Prime Minister emphasized that while numerous discussions and dialogues have been successfully conducted across various sectors, it is now crucial to move beyond conversation and focus on concrete implementation highlighting that meaningful results can only be achieved when ideas and plans are translated into action, and urged all stakeholders and officers to prioritize execution to bring about the positive changes the country needs.

The event was attended by secretary to the Prime Minister, G. P. Saputhanthri, representatives from the central bank, representatives of Ministries and GGGI institute.

[Prime Minister’s Media Division]

Continue Reading

Latest News

1,000-acre forest plantation project to be launched under “Clean Sri Lanka” programme

Published

on

By

Under the “Clean Sri Lanka” programme, plans are underway to launch a 1,000-acre forest plantation project in collaboration with the private sector. This large-scale initiative is designed to operate under the Public-Private-People Partnership (4P) concept and a preliminary discussion on the project was held today (30) at the Presidential Secretariat.

The discussion focused on resolving technical aspects associated with the project and addressing the fundamental issues necessary for the land release.

The programme aims to implement several effective environmental projects in the coming year with the active participation of the private sector. These efforts are intended to safeguard the country’s biodiversity, forest cover and natural ecosystems, while also reinforcing the shared responsibility of the public, government and private sector in environmental conservation.

The discussion was chaired by Senior Additional Secretary to the President  Russell Aponsu and Additional Secretary of the Clean Sri Lanka Programme  S.P.C. Sugeeshwara, with the participation of senior officials from the Ministries of Agriculture, Livestock, Lands and Irrigation and Environment

Continue Reading

Business

European Union has a favorable perspective on the current GSP+ review process.- Charles Whiteley

Published

on

By

The Head of South Asia Division, European External Action Service of the European Union Charles Whiteley stated that the European Union has a favorable perspective on the current GSP+ review process.

He made these remarks during a meeting held today (30) at the Presidential Secretariat with President Anura Kumara Disanayake, as part of an official visit by a European Union delegation to Sri Lanka.

Mr. Whiteley highlighted the longstanding partnership between Sri Lanka and the EU, which has led to significant trade gains. He affirmed the EU’s willingness to continue supporting Sri Lanka in achieving further commercial progress.

He stated that the GSP+ concessions from the European Union are anticipated to encourage Sri Lanka to provide products that meet standardized quality requirements. He further said that the continuation of GSP+ trade concession is assessed on alignment with the current government’s policy commitments and progress.

The meeting assessed Sri Lanka’s advancements in executing 27 international conventions related to the European Union’s GSP+ tax concession, known as the Generalized System of Preferences.

President Disanayake expressed his gratitude for the EU’s assistance during Sri Lanka’s economic crisis. He acknowledged that the GSP+ facility has played an important role in supporting the country’s export sector and economic recovery.

The President further noted that the collapse of Sri Lanka’s economy was the result of a deeply flawed political system, marked by corruption and mismanagement. The President stated that the current administration is working to rebuild the country through stable and transparent governance, though this transformation will require time.

Highlighting a key shift in political support, the President pointed out that unlike previous governments, which relied heavily on support from the South, the current administration was elected with the collective support of Sinhala, Tamil and Muslim communities from across the country. The President reaffirmed his government’s commitment to delivering on the promises made to all citizens.

Also present at the meeting were Minister of Labour, Deputy Minister of Economic Development Dr. Anil Jayantha Fernando, Minister of Justice and National Integration Harshana Nanayakkara, Attorney-at-law, Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma , Senior Additional Secretary to the President Roshan Gamage, the Ambassador designate of the European Union to Sri Lanka and the Maldives . Carmen Moreno, General for Trade and Economic Security – Policy Officer of the European Commission’s Directorate Guido Dolara, Desk Officer for Sri Lanka at European External Action Service Ms. Galija Agisheva along with other EU and Sri Lankan officials.

[PMD]

Continue Reading

Trending