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Monday June 3rd, 2024

Looming global recession threatens dollar earning of Sri Lanka’s top exports

ECONOMYNEXT – A looming recession in Sri Lanka’s main export markets is threatening the island nation’s top export garment sector as orders have slowed down significantly from January next year, government and industry officials said.

The dip could slow down Sri Lanka’s efforts to move out of the unprecedented economic crisis resulted after failed economic policies and heavy money printing under previous President Gotabaya Rajapaksa.

The apparel industry accounts for nearly half of the island nation’s total export earnings. Textiles and garments contributed $5.4 billion last year out of the total annual $9.7 billion export earnings. Apparel exports have accounted for 57 percent of export earnings of $8 billion in the first nine months of this year.

“Normally, we receive apparel orders six months ahead of time. Now we have not received the orders as they already have stocks with them and they don’t have storage facilities,” Indumini Kodikara, Export Services Director, Export Development Board (EDP), told EconomyNext.

“In the next six months, there will be a very low amount of orders.”

The world’s leading economies are sliding into recession as the global energy and inflation crises sparked by Russia’s invasion of Ukraine cut growth by more than what was previously forecasted.

The Joint Apparel Association Forum (JAAF) admitted that the industry has started to see a decline in export orders.

“We are projecting over the next two-three months we will see a drop of 25-30 percent in the order volumes”, JAFF Secretary General Yohan Lawrance told EconomyNext adding that a drop has already been experienced in October.

EDB’s Acting Director of Industrial Products Manoja Dissanayake said the country has seen a decline in some other exports as well.

Sri Lanka has so far seen over $1 billion in monthly export earnings almost throughout this year as the country depreciated the rupee currency by over 50 percent in the last eight months.

Some exporters predict a slowing down of exports from December as the government has raised tax rates. However, the government has said it had not taxed exports.

As a result of the disruption caused by Russia’s invasion of Ukraine, Sri Lanka’s traditional markets such as Europe and USA have been reducing exports amid tightening monetary policy to curb increasing inflation.

Sri Lanka is forced to push itself to look into alternate markets such as India, Russia, Taiwan, and regional countries such as Malaysia and Singapore to boost its exports with or without free trade agreements. (Colombo/Nov23/2022)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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