Business

Revenue decline puts pressure on govt’s fiscal management

Published

5 years ago

2021/07/6

Sahan Weerasooriya

Moves underway to strengthen gross official reserves

Seeking support from IMF ruled out

by Sanath Nanayakkare

As government revenues have fallen below expected levels, fiscal management of the government is under pressure, Ajith Nivard Cabraal, State Minister of Finance, Capital Markets and State Enterprise Reforms said in Colombo yesterday.

He made this remark while speaking at a media briefing held at the Ministry of Finance.

“Although a sovereign bond of USD one billion needs to be settled this month, the actual outflow would be USD 700 million as Sri Lankan citizens own a share of USD 300 million of it. The current reserves are at USD 4 billion. After making this payment, the reserves will technically remain at USD 3 billion. Agreements have been arrived at with People’s Bank of China for a SWAP loan of USD 1.5 billion. In addition, the foreign exchange reserves will have contributions from Bangladesh Bank (SWAP) – USD 200 million, Reserve Bank of India (SWAP) USD 400 million. IMF (SDR allocation) USD 780 million and China Development Bank (Balance Loan) USD 200 million,” he said.

“In the next six months, the Central Bank will purchase USD 500 million from the forex market to consolidate the gross official reserves,” he said.

Further, a number of bilateral discussions are underway including for a USD 500 million syndicated loan while the Central Bank Governor has forecast a decline of imports by USD 700 million. he said.

The state minister said that the government has been able to collect only 34% of the government revenue in the first six months while 48% of the allocated recurrent expenditure has been spent during the period and 30% of the capital expenditure has already been invested in projects.

“Although the exchange rate is Rs. 200 to a USD, further depreciation is possible. The reasons for this are; reluctance of the exporters to convert their forex earnings and importers acting swiftly to import goods to top up their stocks for a longer time than it is necessary,” he said.

Further speaking he said,” The economy weakened from 2015 to 2019. Growth rate declined to 2.3% from 6.8%. Per capita income reported only a slight increase of USD 33 from USD 3,819 to USD 3,852. Gross Domestic Product was up by only USD 4 billion from USD 80 billion to USD 84 billion. Debt to GDP ratio increased to 87% from 72%. The debt stock increased to Rs.13 trillion from Rs. 7.5 trillion. The government’s interest expenditure in proportion to GDP increased to 6% from 4.2%. Due to rupee depreciation during the period, the debt stock rose by Rs. 1772 billion. Sovereign bond interest rate increased to 7.8% from 5.8%. Exports remained at an average of USD 11.1 billion while the trade deficit increased to USD 9.3 billion from USD 7.6 billion. Although sovereign bonds to the tune of USD 12 billion had been issued during the five years, foreign exchange reserved declined to USD 7.6 billion from USD 8.2 billion. The budget deficit increased to 9.6% from from 5.7%. Employed persons reduced to 8.2 million from 8.4 million. Central Bank’s treasury bill holdings shot up to Rs. 75 billion from zero. Rupee to USD exchange rate depreciated by 39% from Rs. 131 to Rs. 182. USD 3,089 million worth of Central Bank reserves were sold to maintain the value of the rupee. If this had not been done, foreign exchange reserves would have remained at USD 10.7 billion. The country’s credit rating downgraded to B (Negative) from BB- (Stable) – four notches during the period. Foreign debt versus domestic debt shifted to 48:52 from 42:58. From 2015 to 2019, government revenue was up by 65%, but as interest rates were high amid low growth, that advantage slipped through.”

“When Covid-19 hit Sri Lanka in 2020, in spite of the resilience some sectors of the economy had shown, the overall economy further weakened. As the economy had been completely shut for 66 days, it led to a negative growth of 3.6% while per capita income declined to USD 3,682 with the lowering of GDP to USD 81 billion. Debt to GDP increased to 101% from 87% while the debt stock increased to Rs.15.1 trillion from Rs. 13 trillion, therefore, interest expenditure was up by 6.5% to GDP in spite of low interest rate.”

Due to rupee depreciation, the debt stock increased by Rs. 356 billion. The repayment of USD 1 billion sovereign bond, the loss of income from Tourism around USD 3.5 billion, foreign exchange reserves fell to USD 5.7 billion from USD 7.6 billion. The impact of Covid-19 saw a spike in expenditure by about Rs. 100 billion while the government revenue declined, hence the budget deficit increased to 11.1%. The rupee depreciated 2.6% versus the USD to Rs. 187. However, the Central Bank bought USD 283 million from the forex market, and in 2021, the Bank has bought USD 130 million up to now. While the credit rating was downgraded to CCC(Stable) foreign debt to local debt ratio turned favourable by becoming 40:60 from 48:52. Low interest rate in 2020 brought some relief to the overall economy while the government also gained from it. Although exports were down to USD 10 billion, thanks to import controls, the trade balance was reduced to USD 6 billion.”

The state minister said that although there is a challenge to managing the economy, the government would not run away from its responsibility and would restore it a point where there is space for Sri Lanka to make a favourable turnaround with expected non-debt creating inflows to the Port City, Hambantota Industrial Zone, Pharmaceutical Manufacturing Zone, and last but not least with Sri Lanka Tourism reopening its boarders for the lucrative industry as the vaccine rollout is progressing well.

He empasised the fact that the government would not look to the IMF to get any help from it as those who recommend it want the government to get into difficulty as we would have to fall in line with IMF’s stringent economic recipe and conditions which come in hand in hand with their support.

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Business

PM ‘Rings the Bell’ at CSE to champion financial literacy and investor education

Published

20 hours ago

2026/10/7

Sahan Weerasooriya

P.M. Dr.Harini Amarasuriya

As part of World Investor Week (WIW) 2026, the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) joined stock exchanges around the world in ringing the market opening bell for financial literacy on 5 October 2026, under the patronage of Dr. Harini Amarasuriya, Prime Minister of the Democratic Socialist Republic of Sri Lanka.

World Investor Week is an annual global campaign led by the International Organization of Securities Commissions (IOSCO) to raise awareness of the importance of investor education and investor protection. The “Ring the Bell for Financial Literacy” initiative, pioneered by the World Federation of Exchanges (WFE), brings together stock exchanges and other stakeholders worldwide to promote greater financial literacy and encourage individuals to make informed financial decisions.

The ceremony also marked the 40th anniversary of the CSE and the joint launch by the SEC and the CSE of the Stock Market Game, an online stock market simulation based on the ATrad trading system.

The Stock Market Game enables participants to gain practical experience of how the stock market works, make investment decisions and construct portfolios of listed shares without using real money. The platform is accessible through the websites of the SEC and CSE and is expected to serve as an important practical tool for promoting financial education. It is envisaged that the Stock Market Game will also be used to conduct simulation competitions among universities and the 100 Capital Market Clubs established in schools across the country.

The ceremony also featured the commemorative issuance of a stamp and First Day Cover to mark the 40th anniversary of the CSE. Issued in collaboration with the Department of Posts and the Philatelic Bureau of Sri Lanka, the commemorative stamp and First Day Cover were presented to Prime Minister Dr. Harini Amarasuriya, by the SEC Chairman Snr. Prof. D.B.P.H. Dissabandara and Ray Abeywardena, Director CSE and Chairman of Central Depository Systems (CDS).

Welcoming the gathering, Rajeeva Bandaranaike, Chief Executive Officer of the CSE, highlighted the importance of obtaining reliable information when making investment decisions.

“We operate in a digital world where a vast amount of information and data is disseminated through social media. While some of this information is factual, some may be inaccurate or misleading. When investing in the stock market, it is essential to make informed and prudent investment decisions. Therefore, investors should obtain information and data from reliable and responsible sources and persons before making investment decisions.”

Addressing the gathering, SEC Chairman Snr. Prof. D.B.P.H. Dissabandara emphasised that the SEC’s role extends beyond regulation to facilitating the further development of the capital market.

“The SEC needs to determine how best to introduce the stock market to Generation Alpha, Generation Beta and generations beyond. When it comes to investors, we need to build confidence in the market, because people will invest only when they have confidence in the market.’’

Business

Rs. 5 million worth of prizes to be given at 8th edition of CSE Masterminds Quiz Competition

Published

20 hours ago

2026/10/7

Sahan Weerasooriya

The Colombo Stock Exchange (CSE) has announced that the eighth edition of the CSE Masterminds Quiz will be held on 9th October 2026, from 3.00 p.m. onwards, at the Main Ballroom, Shangri-La Colombo.

Recognised as Sri Lanka’s premier capital market quiz competition, CSE Masterminds brings together teams from the public and private sectors. Participants will be tested across international business, global markets, current affairs, the Sri Lankan economy and business, the Sri Lankan stock market, and sports and entertainment, before a concluding rapid-fire round.

This year the winning team can win up to Rs. 2,000,000, the runners-up up to Rs. 1,000,000, and the second runners-up Rs. 750,000. Sector awards will also be presented to the highest-performing team from each participating sector. Guest participants will also be able to compete in rounds of Audience questions, and will have the opportunity to participate a raffle draw for three free return tickets provided by Fits Aviation (Pvt) Ltd.

The evening will also include an exclusive after-party with live music provided by the band ‘Doctor’ featuring guest performer Umara Sinhawansa, fine food and beverages, providing an opportunity for networking and celebration. Every participant will receive a premium goodie bag made possible by the support of the event’s sponsorship partners. Collectively, the event will feature over Rs. 5 million worth of prizes, rewards, and giveaways, encompassing championship prizes, sector awards, audience engagement prizes, raffle draw offerings, and goodie bags.

Sponsorship partners include:

Platinum Sponsors: Hatton National Bank PLC and Bartleet Religare Stockbrokers (Pvt) Ltd.

Gold Sponsors: Ex-Pack Corrugated Cartons PLC, Asha Securities Ltd., and Lanka Securities (Pvt) Ltd.

Silver Sponsors: Barista Coffee Lanka (Pvt) Ltd., Capital Trust Holdings (Pvt) Ltd., LOLC Holdings PLC, Arpico Ataraxia Asset Management (Pvt) Ltd., IronOne Technologies (Pvt) Ltd., and LankaPay (Pvt) Ltd.

Co-Sponsors: Access Engineering PLC, Bank of Ceylon, Commercial Bank of Ceylon PLC, CryptoGen (Pvt) Ltd., Deloitte Lanka (Private) Limited, Dialog Finance PLC, Efutures (Pvt) Ltd., People’s Leasing & Finance PLC, Senfin Asset Management (Pvt) Ltd., and Softlogic Stockbrokers (Pvt) Ltd.

Business

NCCSL to conduct practical workshop on food labelling and advertising regulations in Sri Lanka

Published

20 hours ago

2026/10/7

Sahan Weerasooriya

The National Chamber of Commerce of Sri Lanka (NCCSL) is organizing a one-day practical workshop on “Food Labelling & Advertising Regulations in Sri Lanka” on Thursday, 8th October 2026 from 9.00 a.m. to 4.30 p.m. at the National Chamber of Commerce, Colombo 10. The workshop has been organised to provide a practical understanding of the latest regulatory requirements governing the food products labelling and advertising of food products in Sri Lanka, with particular attention to regulatory developments applicable in 2026, compliance requirements, and the potential legal and financial implications of non-compliance.

As food products increasingly compete not only with quality and price but also on packaging, labelling and promotional claims, businesses must ensure the information they communicate to consumers is accurate, transparent and consistent with applicable regulatory requirements. Understanding these requirements is therefore essential for businesses seeking to protect their brands, maintain consumer confidence, and minimize regulatory and legal risks.

The practical workshop will go beyond an overview of regulations and focus on how businesses can apply regulatory requirements in their day-to-day operations. Participants will be guided through key areas of food regulatory compliance, including the national food regulatory framework, recent food labelling regulations and key changes, mandatory approvals and prohibitions relating to food labelling, and the litigation process associated with regulatory violations. The programme will also cover several areas of growing importance to the food industry, including the EU EMPCO Directive, food colour coding regulations, regulations relating to food trans-fatty acids and the importance of compliance in the use of food additives. Practical exercises will further enable participants to apply their knowledge to real-world compliance situations and strengthen their ability to identify potential regulatory concerns.

For further information and registration, please contact the National Chamber of Commerce of Sri Lanka on 011 4741788 – Nethmi or Udula – 071 403 4775.