An Echelon Media Company
Monday June 3rd, 2024

Sri Lanka growth may fall below 3-pct in 2019: Report

ECONOMYNEXT- Sri Lanka’s economy is expected to grow below 3 percent in 2019 after the Easter Sunday attacks dampened growth prospects, the research arm of First Capital, an investment house, said.

"The Easter Sunday attack is expected to have a detrimental impact on the economy possibly further slowing down the sluggish economy," FC Research said.

"We expect the recovery would require at least a one year period, forcing a downward revision to our 2019 GDP growth projection to below 3.0 percent from the previous 4.3 percent," it said.

Even before the bombings, the economy showed signs of further slowdown, due to an extended period of liquidity shortages, and falling private credit, with banks witnessing higher bad loans.

"Falling below the CBSL credit growth projection of 13.5 percent, private sector credit growth decelerated at an alarming rate to record a year-to-date growth of 0.5 percent during the first quarter leading to a contraction in financial sector asset base," FC Research said.

In the December quarter, growth had been 1.8 percent, as a political crisis and liquidity shortages, especially in the construction sector, suppressed growth.

FC Research said that the central bank is almost certain to cut policy rates to spur growth.

Sri Lanka’s central bank is at the moment keeping overnight rates up using term repo deals to withdraw cash instead of outright sales of bills.

"First Capital Research allocates a 95 percent probability for a policy rate cut in May 2019 as we are of the view that policy intervention is inevitable to revive the overly sluggish economy and credit growth," the firm said.

FC Research said that a 50 basis point cut is most likely (60 percent likelihood), followed by a 75 basis point cut, whereas a 25 or 100 basis point cut are less likely.

The last statement from the monetary board in April had said that there was a possibility of a rate cut in May, while Central Bank Governor Indrajit Coomaraswamy, in two seperate occasions over the past 10 days, has said a rate cut was on the cards.

FC Research said economic stability had improved with the International Monetary Fund balance of payment support program being extended till June 2020, and foreign reserves remaining above 7 billion US dollars despite outflows in April. (Colombo/May28/2019)
 

Leave a Comment

Your email address will not be published.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

Leave a Comment

Leave a Comment

Cancel reply

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

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)

Continue Reading

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)

Continue Reading

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)

Continue Reading