Business
SL clinches deal with IMF for 4-year EFF of $ 2.9 billion subject to debt restructuring and prior actions
By Hiran H.Senewiratne
The International Monetary Fund said it had reached a deal with Sri Lanka for a 4-year 2.9 billion US dollar extended fund facility subject to debt restructuring and prior actions.Under the program the Sri Lankan budget will have to generate a primary surplus (debt before interest) of 2.3 per cent by 2024. The 2022 expected primary deficit is 4 per cent of GDP, the IMF senior mission led by Peter Breuer said.
“These reforms include making personal income tax more progressive and broadening the tax base for corporate income tax and VAT. The program aims to reach a primary surplus of 2.3 per cent of GDP by 2024, Breuer said at a media conference at the Central Bank head office in Colombo yesterday. Breuer together with Masahiro Nozaki and other members of the IMF delegation visited Sri Lanka from August 24 to September 1 to continue discussions on IMF support for Sri Lanka and the local authorities’ comprehensive economic reform program.
Breuer added: ‘The 2022 primary deficit was projected by the government at -4.0 per cent of GDP. Sri Lanka will also have to negotiate with creditors to restructure debt.
“The agreement is subject to the approval by the IMF management and the Executive Board in the period ahead, contingent on the implementation by the authorities of prior actions and on receiving financing assurances from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors.
“Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and to close financing gaps.
“The Central Bank will also have to stop printing money (monetary financing) and bring down inflation.’’
The full IMF statement is reproduced below:
“The Sri Lankan authorities and the IMF team have reached staff-level agreement to support the authorities’ economic adjustment and reform policies with a new 48-month Extended Fund Facility (EFF) with a requested access of about SDR 2.2 billion (equivalent to US$2.9 billion).
“The new EFF arrangement will support Sri Lanka’s program to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, reducing corruption vulnerabilities and unlocking Sri Lanka’s growth potential.
“The agreement is subject to the approval by IMF management and the Executive Board in the period ahead, contingent on the implementation by the authorities of prior actions, and on receiving financing assurances from Sri Lanka’s official creditors and making a good faith effort to reach a collaborative agreement with private creditors. Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps.
“Sri Lanka has been facing an acute crisis. Vulnerabilities have grown owing to inadequate external buffers and an unsustainable public debt dynamic. The April debt moratorium led to Sri Lanka defaulting on its external obligations, and a critically low level of foreign reserves has hampered the import of essential goods, including fuel, further impeding economic activity. The economy is expected to contract by 8.7 per cent in 2022 and inflation recently exceeded 60 per cent. The impact has been disproportionately borne by the poor and vulnerable.
“Against this backdrop, the authorities’ program, supported by the Fund, would aim to stabilize the economy, protect the livelihoods of the Sri Lankan people, and prepare the ground for economic recovery and promoting sustainable and inclusive growth.
Key elements of the program are:
Raising fiscal revenue to support fiscal consolidation. Starting from one of the lowest revenue levels in the world, the program will implement major tax reforms. These reforms include making personal income tax more progressive and broadening the tax base for corporate income tax and VAT. The program aims to reach a primary surplus of 2.3 per cent of GDP by 2024.
Introducing cost-recovery based pricing for fuel and electricity to minimize fiscal risks arising from state-owned enterprises. The team welcomed the authorities’ already announced substantial revenue measures and energy pricing reforms;
Mitigating the impact of the current crisis on the poor and vulnerable by raising social spending, and improving the coverage and targeting of social safety net programs;
Restoring price stability through data-driven monetary policy action, fiscal consolidation, phasing out monetary financing, and stronger Central Bank autonomy that allow pursuing a flexible inflation targeting regime. A new Central Bank Act is a cornerstone of this strategy;
Rebuilding foreign reserves through restoring a market-determined and flexible exchange rate, supported by the comprehensive policy package under the program;
Safeguarding financial stability by ensuring a healthy and adequately capitalized banking system, and by upgrading financial sector safety nets and regulatory standards with a revised Banking Act; and Reducing corruption vulnerabilities through improving fiscal transparency and public financial management, introducing a stronger anti-corruption legal framework, and conducting an in-depth governance diagnostic, supported by IMF technical assistance.
The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Prime Minister Dinesh Gunawardena, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Secretary to the Treasury K M Mahinda Siriwardana, and other senior government and CBSL officials. It also met with parliamentarians, representatives from the private sector, civil society organizations and development partners.
DIMO Academy, the vocational training arm of DIMO, recently announced a groundbreaking partnership with HomeServe Germany, a leading HVAC company offering installation, home repair, maintenance, and insurance services. This joint endeavor aims to strengthen vocational education in Sri Lanka by providing assured job placements in the thriving German building service industry for local youth with globally recognized qualifications.
Under this collaboration DIMO Academy will offer a world-class qualification based on strict German vocational standards, leading to a German Diploma in Plant Engineering accredited by the German Chamber of Industry and Commerce (AHK). Graduates will also receive German language training to ensure they can start their careers in Germany successfully. Upon the completion of this program, certified graduates will be recruited by HomeServe Germany, guaranteeing their future as skilled experts in the German building service industry.
The partnership meets the growing global demand for skilled building service technicians, especially in HVAC, driven by energy efficiency, sustainable construction, and urbanization, with Germany facing a shortage due to its high standards and focus on renewable technologies.
DIMO has also invested in an ultra-modern training facility in Peliyagoda, set to open in February 2025. This facility will be furnished with extensive technological resources, making sure students are trained to the highest international standards while also enhancing the local building services industry.
Dilrukshi Kurukulasuriya, Executive Director and Chief Human Resources Officer of DIMO and Head of the Group’s Education Arm said, “DIMO Academy’s Diplomas in Automobile Mechatronics and Plant Engineering, certified as category-A qualifications, in Germany make graduates eligible to work as technicians around the globe. DIMO Academy introduced the Diploma in Plant Engineering program to open diverse global career opportunities for young people in the building services industry. DIMO Academy offers a structured industrial training, with updated syllabus through a unique self-learning methodology and German-qualified trainers, in its world-class training facilities. It also upholds high standards through rigorous selection process, continuous assessments, and external audits by German and Sri Lankan bodies.
This alliance showcases the DIMO Academy’s commitment to strengthen partnerships with the global industry to foster employment opportunities and the exchange of technical knowledge for local youth while fuelling their dreams and aspirations. We are indeed privileged to partner with HomeServe Germany, a leading company in the global building services industry”, she added.
Thomas Rebel, CEO of HomeServe Germany f stated, “In Germany, there is a great need for technicians in the building services industry. Being a top provider of building services, we need highly qualified technicians to support our customers. Our HVAC businesses in Germany already have an apprenticeship rate of more than 15% today. Nevertheless, the demand for skilled workers is high and cannot be met solely through education in Germany. The only school outside of Germany to offer a category “A” recognized training program in building services following German vocational criteria is DIMO Academy. With more than 650 graduates working all over the world and 35 years of experience in German vocational training in Sri Lanka, DIMO Academy credentials are entirely accepted in Germany in compliance with German standards.”
Business
Lanka Hospitals launches affordable cardiac care Initiative for public sector workforce and Agrahara members
Lanka Hospitals has announced a groundbreaking initiative to provide affordable cardiac care to government servants, retired government servants and Agrahara insurance members. This program aims to alleviate the financial burden of heart surgeries and angiograms amidst challenging economic times, making high-quality cardiac care accessible to those who serve and have served the nation.
Under this special offer, the cost of a Heart Surgery, typically LKR 1,400,000, is now reduced to LKR 1,100,000, providing a saving of LKR 300,000. Angiograms are available at just LKR 50,000, and for patients undergoing heart surgery at Lanka Hospitals, the hospital charges for the angiogram will be completely waived, reducing the cost to only LKR 20,000. Additional benefits are extended exclusively to Agrahara members under this program.
Deepthi Lokuarachchi, Group Chief Executive Officer of Lanka Hospitals Group, emphasized the significance of the initiative: “Our latest offer on heart surgeries and angiograms underscores our commitment to easing the financial strain on public sector employees and retirees.
We are dedicated to ensuring that essential medical services, like advanced cardiac care, are both affordable and accessible without compromising on quality. Through this initiative, we continue to honor the invaluable contributions of Sri Lanka’s government workforce by combining compassionate care with state-of-the-art medical expertise.”
This initiative comes against the backdrop of an agreement with the National Insurance Trust Fund (NITF), which administers the Agrahara Insurance Scheme, further enhancing healthcare benefits for eligible patients.
It also reflects Lanka Hospital’s continued dedication to improving patient outcomes and supporting the health and well-being of Sri Lanka’s public sector workforce.
For more information about this special offer and the exclusive benefits for Agrahara members, contact Lanka Hospitals’ hotline at 0117 145 145.
Business
Sampath Bank introduces new heights of exclusivity in credit card landscape with Visa Infinite Metal credit card
Sampath Bank and Visa have unveiled the nation’s very first Visa Infinite Metal Credit Card, setting a new standard and marking a significant milestone in Sri Lankan banking. Launched at the iconic Cinnamon Life, Colombo’s City of Dreams, this elite card represents a step into unparalleled elegance, offering an array of exclusive privileges designed to meet the desires of discerning cardholders who seek a premium lifestyle experience and access to an elite world of benefits.
More than just a financial instrument, the Visa Infinite Metal Credit Card offers a gateway to a lifestyle that combines elevated service, distinct status, and sophisticated benefits for cardholders in Sri Lanka. Created specifically for those who value the extraordinary, the card delivers an array of global privileges from complimentary priority lounge access at airports to exclusive benefits across luxury retail, dining, and hospitality worldwide. Furthermore, cardholders enjoy the convenience of Visa’s 24/7 Concierge Service via WhatsApp, access to an exclusive travel concierge for seamless travel experiences, a competitive foreign currency markup, and the personalised support of a dedicated relationship officer for all their needs.
Tharaka Ranwala, Senior Deputy General Manager – Marketing, Customer Care, and Card Centre at Sampath Bank said, “With the Visa Infinite Metal Credit Card, we are introducing a new standard of exclusivity in Sri Lanka’s Credit Card landscape. This card is not just about providing superior financial services, it’s about redefining the customer experience by offering benefits that enhance their lifestyle, positioning Sampath Bank at the forefront of luxury banking.”
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