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Monday June 3rd, 2024

Sri Lanka imports fall in July 2020 amid credit contraction, import controls

ECON0MYNEXT – Sri Lanka’s imports fell 24 percent from a year earlier to 1,294 million US dollars in July 2020, central bank data showed, amid a credit contraction and import controls imposed after unprecedented money printing triggered forex shortages in March 2020.

Exports grew 8.7 percent to 1,085 million dollars in July 2020 and the deficit contracted to 209 million US dollar from 717 million dollars last year.

Sri Lanka’s imports usually contract as consumption and private credit fall after a currency crisis, shrinking economic growth, but in 2020, severe import controls not seen since the collapse of the Bretton Woods system of soft-peg in 1971 had been imposed.

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Sri Lanka has highly unstable soft-peg set up in the style of Latin America style central banks by Federal Reserve officials inspired by Argentina central bank creator Raul Prebish and Robert Triffin leading to severe monetary instability.

Many countries with Prebish-Triffin style central banks have ended up in sovereign default amid output shocks and currency collapses.

In July consumer goods fell 18.7 percent to 289 million US dollars, with non-foods falling 35 percent to 159.4 million US dollars.

Vehicle imports fell to just 6.1 million US dollars from 95.4 million US dollars a year earlier. It is not clear how much import controls are contributing to the credit collapse.

Telecom device imports surged 75 percent to 45.6 million US dollars amid Coronavirus pandemic and work from home.

Intermediate goods fell 24 percent to 734 million US dollars. Fuel imports were down 36 percent to 200 million US dollars.

Textile imports, which are usually an export input fell 20 percent to 197 million dollars.

Investment goods fell 31 percent to 269 million US dollars.

Exports grew 3.8 percent to 819.4 million US dollars with food and beverages p 75 percent to 64.3 million dollars rubber products up 7.8 percent to 82.2 million US dollars and textiles and garments down 8.8 percent to 404.3 million US dollars.

Earnings from tourism were listed as zero. Worker remittances were up 12.2 percent to 702 million US dollars.

While imports usually fall when there is a credit contraction, the fall in tourism receipts should also reduce imports as workers lose income, in the absence of money printing.

Sri Lanka has a merchandise trade deficit partly due to spending remittances as well as financing a part of the budget deficit through foreign borrowings. There is a current account deficit due to foreign financing of the budget deficit and foreign direct investment.

However net repayments of debt will tend to narrow and could also reverse a current account deficit.

(Colombo/Sep14/2020)

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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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