Economy Archives - Page 9 of 11

Sri Lanka’s Foreign Reserves Rebound to $5.5 Billion by April 2024

Sri Lanka’s foreign reserves have bounced back to $5.5 billion by April 2024. This signals a positive trend for the nation’s economic stabilization efforts. The recovery in currency reserves is expected to boost the country’s financial stability.

Foreign Reserves Rebound to $5.5 Billion by April 2024

The World Bank and Asian Development Bank predict positive growth for Sri Lanka in 2024. They project a moderately optimistic outlook over the medium term. The current account may show a slight surplus.

This surplus is likely due to controlled import growth. The revival of tourism and remittances inflows also plays a key role. These factors are vital for strengthening foreign reserves and improving import coverage.

The International Monetary Fund (IMF) has supported Sri Lanka’s economic recovery. Their Extended Fund Facility has helped build up foreign reserves. The government’s debt restructuring efforts have also been crucial.

These actions have created a more stable financial environment. They have boosted confidence among investors and international partners.

Economic Recovery and Stabilization

Sri Lanka’s economy is showing signs of recovery. GDP growth is projected to turn positive in 2024. The World Bank forecasts a 2.2% growth rate for 2024.

This recovery is backed by the IMF’s $2.9 billion bailout package. The package aims to stabilize the economy and promote reforms.

Inflation Expected to Remain Benign in Medium Term

Inflation in Sri Lanka has dropped significantly. Year-on-year headline inflation fell to 1.3% in September 2023. It rose to 4.0% by the end of 2023 due to supply factors.

Core inflation also decreased, showing low demand pressures. Inflation may change due to new VAT rules in January 2024. However, it should stay low as demand remains weak.

Current Account Surplus Driven by Tourism and Remittances

Sri Lanka’s current account surplus is growing. This is due to strong tourism and remittance inflows. Tourism arrivals topped 700,000 in the first 14 weeks of 2024.

Remittances increased to $572 million in March 2024. These inflows are vital for the country’s balance of payments and foreign reserves.

Sri Lanka tourism and remittances

The boost in tourism and remittances helps offset the economic damage. The long crisis has hurt household finances and business activity. As the economy stabilizes, confidence is expected to grow.

Indicator	2023	2024 (Projected)
GDP Growth	-3.5%	2.2%
Inflation (Year-end)	4.0%	4.5%
Tourism Arrivals (Jan-Mar)	270,000	700,000
Remittances (March)	$475 million	$572 million

Foreign Reserves Rebound to $5.5 Billion by April 2024

Sri Lanka’s official reserves have shown a remarkable recovery. They rose from $1.9 billion in late 2022 to $5.5 billion by April 2024. This excludes a swap facility from the People’s Bank of China.

The IMF Extended Fund Facility of $2.9 billion has played a key role. Approved in March 2023, it has greatly boosted the country’s reserve position.

Improved Balance of Payments Position

Sri Lanka faces a growing trade deficit due to rising import spending. However, net inflows from the services sector, especially tourism, have helped offset this.

A new e-visa system and the Pekoe Trail are set to boost tourism. These initiatives, backed by the EU and USAID, should improve the balance of payments.

IMF Extended Fund Facility Supporting Reserve Buildup

The IMF Extended Fund Facility has been crucial for Sri Lanka’s reserve buildup. The country’s commitment to economic reforms has secured this vital support.

Sri Lanka continues to work with the IMF and other partners. This collaboration is expected to strengthen its reserve position and enhance economic stability.

Debt Restructuring Efforts Paving Way for Financial Stability

Sri Lanka is negotiating debt restructuring with international bondholders. These talks are key to restoring debt sustainability and regaining market access.

The government is working hard to reach agreements with creditors. These efforts are creating a better environment for economic growth and investment.

Indicator	Value
Foreign Reserves (April 2024)	$5.5 billion
IMF Extended Fund Facility	$2.9 billion
GDP Growth Forecast (2024)	2.6%

Conclusion

Sri Lanka’s economy is looking up. Foreign reserves are expected to reach $5.5 billion by April 2024. This signals a positive shift in the nation’s economic outlook.

The country’s GDP growth forecast for 2024 has been revised to 2.6%. This contributes to the South Asian subregion’s expansion. The subregion is projected to grow by 6.3% in 2024 and 6.5% in 2025.

However, risks remain. These include the need for deep debt restructuring and potential reform fatigue. Upcoming elections and the recent economic crisis also pose challenges.

These risks are high in Sri Lanka and other South Asian economies. They face high public debt, weak external reserves, and geopolitical tensions.

Implementing the IMF’s structural reform program is crucial. It will boost investor confidence and attract fresh capital inflows. This will support a stronger economic recovery in the medium term.

The Central Bank of Sri Lanka has kept the policy rate at 6 percent. Their medium-term inflation target is 5 percent. Private sector credit growth and lower non-performing loans show a stabilizing financial sector.

The current account deficit is narrowing. Foreign exchange reserves now cover over 4 months of projected imports. Sri Lanka’s economic prospects are improving, despite challenges on the road to recovery.

HNB Procurement Earns ISO 9001:2015 Certification

Hatton National Bank PLC (HNB) has reached a major milestone in procurement excellence. The bank’s Procurement Functions have earned the ISO 9001:2015 certification from Bureau Veritas. This recognition highlights HNB’s dedication to top-notch quality management.

HNB Procurement Function Earns Prestigious ISO 9001:2015 Certification

The certification covers HNB’s IT, Stationery, and General Procurement processes. It shows the bank’s focus on improving operations and supplier relationships. This achievement makes HNB a leader in the financial sector.

HNB continues to prioritize efficiency and service excellence. The bank operates through 254 customer centers across Sri Lanka.

HNB Procurement Function Earns Prestigious ISO 9001:2015 Certification

Hatton National Bank’s (HNB) Procurement Function has achieved ISO 9001:2015 certification. This milestone showcases HNB’s dedication to top-quality and efficient procurement processes. The certification proves HNB’s commitment to excellence in banking operations.

Benchmark of Excellence in Procurement Processes

ISO 9001:2015 is a global standard for quality management systems. HNB’s certification shows its use of international best practices in procurement. This achievement sets a new bar for excellence in the banking industry.

The bank’s dedication to ongoing improvement in procurement is clear. HNB continues to lead the way in banking innovation and efficiency.

Certification Awarded by Bureau Veritas

Bureau Veritas, a global certification body, awarded HNB the ISO 9001:2015 certification. They performed a thorough review of HNB’s procurement processes. The bank met the strict ISO 9001:2015 standard requirements.

This success shows HNB’s focus on quality, risk management, and compliance. The bank ensures top-notch performance in all procurement functions.

Covers IT Procurement, Stationery Procurement, and General Procurement

The certification applies to HNB’s IT, Stationery, and General Procurement processes. This wide coverage ensures high standards across all procurement operations. HNB aligns its practices with global benchmarks for better efficiency.

By improving these processes, HNB boosts its ability to serve customers. The bank continues to provide superior value to all stakeholders.

Commitment to Service Quality and Operational Excellence

HNB’s procurement function has earned the ISO 9001:2015 certification. This achievement highlights their dedication to efficient processes. It also shows their commitment to service quality across procurement operations.

ISO 9001:2015 Certification Reinforces Dedication to Efficient and Standardized Processes

HNB aligns its procurement with ISO 9001:2015 international benchmarks. This ensures high standards of operational efficiency. The certification involved thorough reviews and documentation of processes.

HNB fosters a culture of continuous improvement. They strive for excellence in all aspects of procurement.

Aligns Operations with Rigorous International Benchmarks

The ISO 9001:2015 certification ensures HNB follows global best practices. This guarantees consistency and reliability in procurement processes. HNB shows its commitment to superior service quality through this certification.

Enhances Customer Satisfaction through Robust Quality Management Systems

HNB implements strong quality management systems with ISO 9001:2015. These systems help meet and exceed customer expectations consistently. This approach enhances satisfaction and builds long-term relationships with stakeholders.

HNB prioritizes service reliability and consistency. This positions them as a trusted partner in the financial industry.

Benefits of ISO 9001:2015 Certification for HNB and Stakeholders

HNB’s Procurement Function has earned ISO 9001:2015 certification. This achievement brings many benefits to the bank and its stakeholders. It shows HNB’s dedication to efficient, transparent, and customer-focused procurement processes.

Strengthens Internal Processes and Compliance

The certification bolsters HNB’s internal processes. It ensures all procurement activities follow clear procedures and guidelines. This enhancement improves compliance with regulations and reduces non-conformity risks.

HNB can maintain consistent and reliable procurement operations. This is achieved through robust quality management systems.

Enhances Risk Management and Service Reliability

ISO 9001:2015 certification boosts risk management in HNB’s procurement. The bank can ensure reliable supply chain management by identifying and reducing potential risks.

This proactive approach builds stakeholder confidence. They can trust HNB to deliver products and services without interruptions.

Affirms Position as a Customer-Centric Financial Institution

The certification confirms HNB as a progressive, customer-focused financial institution. It shows HNB’s commitment to high-quality, efficient procurement processes.

This achievement proves HNB’s dedication to ongoing improvement. It also demonstrates the bank’s ability to exceed industry standards in service quality and customer satisfaction.

Sri Lanka’s E-Government Services Expand Amidst Pandemic

The South Asian island nation of Sri Lanka is seeing big changes in how it’s run. Thanks to digital transformation, the government is pushing fast to get online government services out there. This ensures important work can still happen, even in tough times. The pandemic has really made the move to remote access to government services take off. It’s all part of a plan to grow Sri Lanka’s digital economy.

With the help of State Minister Kanaka Herath, Sri Lanka has big digital goals. They want their digital economy to hit about $15 million by 2030. That’s a huge jump from $4 million in 2022. They’ve set up a plan with the National Digital Strategy 2030. It aims to get more people online and build a strong digital infrastructure.

COVID-19 shook things up, but Sri Lanka kept moving forward. More people are using the internet and social media now than before. The government is working hard to make e-services better. And they’re excited about starting a new digital ID system.

At the same time, Sri Lanka is beefing up its digital laws. They’ve approved the Data Protection Act. This creates a new Data Protection Authority. They’re also working on a Cyber-Security Act. These moves are all about keeping data safe and making sure their digital government is strong.

Sri Lanka’s dedication to digital is inspiring. It’s not just about technology; it’s about bringing people together and making life better. They’re using tech to improve things like health and farming. This will keep the economy and people’s health strong after the pandemic.

Sri Lanka’s E-Government Services Expand Amidst Pandemic

Sri Lanka has taken big steps in digital governance, especially because of COVID-19. It is working on making government e-services and improving government digital infrastructure better. This helps meet the urgent needs of its people. It also increases digital use among them.

The Genesis of Digital Governance in Sri Lanka

Sri Lanka started its digital governance to improve life quality. It looked up to Estonia, known for its digital success. Sri Lanka wants to raise its digital literacy rate and get more people online. Right now, only 37% of its residents use the internet.

Even with better technology and lower costs, more digital projects are needed. A big problem is that many people don’t know enough about how to use digital tools well.

Accelerated Digital Transformation Through National Digital Strategy 2030

COVID-19 made Sri Lanka push its digital change faster with its National Digital Strategy 2030 plan. This plan uses technology to help in social and economic growth. By improving government e-services, it builds a strong digital environment. This prepares Sri Lanka for future challenges and ensures everyone can access information and services.

The Role of ICTA During the COVID-19 Outbreak

During COVID-19, the ICTA showed how vital it is. It came up with digital solutions to help manage the crisis. ICTA created apps like MyHealth Sri Lanka. These apps shared important information and helped with things like airport clearances and tracking contacts.

The work by ICTA supports digitalization initiatives and the aim to improve government digital infrastructure. These efforts link to the National Digital Strategy 2030. They show a plan to increase tourism, enhance public health, and promote digital skills. This creates a digital-first mindset in government and public actions.

Year	Internet Penetration Rate (%)	Digital Literacy Rate (%)
2019	29.3	28.6
2020	34.3	37.0
2021	38.5	42.0

As Sri Lanka moves forward after the pandemic, improving digital skills is key. By focusing on government e-services, the country is a model for blending digital and traditional governance. This approach makes the society more connected and stronger.

Driving Factors Behind the Surge in Digitalization

Sri Lanka is quickly becoming digital, thanks to several reasons. The COVID-19 pandemic made digital options a must. The country now aims to be a big part of the global digital marketplace. With over 60% of people having mobiles, there’s a strong base for digital growth. Sri Lanka’s digital sector is now worth almost US$3.47 billion. This shows the nation’s big push toward digital technology.

Working with other countries is key to Sri Lanka’s digital plans. For example, India helped fund the Unique Digital Identity Project with 450 million Indian rupees. This project and others like MOSIP show Sri Lanka’s effort to give its citizens a digital ID. But there have been challenges, like delays and worries about data safety. These issues highlight the need for strong privacy and security steps.

Sri Lanka is also focusing on digital education. Projects like ECD and AHEAD are enhancing digital skills among students. This effort is supported by the World Bank and the Asian Development Bank (ADB). The country is getting ready for a future with a digital-savvy workforce.

Sri Lanka Declares Bankruptcy Amidst Economic Crisis 2022

Sri Lanka faces its worst economic collapse since 1948. The country’s financial woes have led to sky-high inflation and depleted foreign reserves. Essential goods are scarce, and basic commodity prices have soared.

Sri Lanka Declares Bankruptcy Amidst Severe Economic Crisis in 2022

The crisis has sparked nationwide protests and resulted in Sri Lanka’s first sovereign debt default. Prime Minister Ranil Wickremesinghe admitted in parliament that the economy had collapsed.

Political turmoil and poor economic choices have worsened the situation. The Sri Lankan Rupee hit a record low of LKR 368.50 against the US dollar in November 2022.

This represents a 555% annual depreciation. By May 24, 2023, the currency had improved to LKR 305.00. However, economic recovery remains a distant goal.

The country’s heavy reliance on foreign debt and dwindling reserves have contributed to the crisis. Policy missteps have also played a role. These factors have left Sri Lankans bearing the brunt of economic hardship.

Background of Sri Lanka’s Economic Crisis

Sri Lanka’s economic crisis has been brewing for over a decade. The country’s debt-to-GDP ratio has been rising since 2010. Foreign debt skyrocketed from $11.3 billion in 2005 to $56.3 billion in 2020.

The debt as a percentage of GDP jumped from 42% in 2019 to 119% in 2021. This massive debt, along with policy confusion and political turmoil, led to economic collapse.

Sri Lanka debt-to-GDP ratio

The Institute of Policy Studies of Sri Lanka warned about economic risks in 2014. However, the government ignored these economic warnings. Political chaos in 2018 made things worse.

A new government in 2019 scrapped the Central Bank Bill. This bill aimed to free the bank from political meddling and stop money printing.

Mounting Debt and Dwindling Reserves

Sri Lanka’s foreign currency reserves have fallen drastically. They dropped from $7.6 billion in late 2019 to $250 million in early 2022. The country owes $7 billion to China and $1 billion to India.

Sri Lanka faces a yearly deficit of $3 billion due to import-export imbalance. This has made it hard for the country to pay its debts.

Year	Foreign Debt (US$ billion)	Foreign Debt as % of GDP
2005	11.3	–
2019	–	42%
2020	56.3	–
2021	–	119%

In 2019, the government slashed taxes, losing $1.4 billion in yearly revenue. This put more strain on the country’s finances. Sri Lanka’s external debt kept growing, with $8.6 billion due in 2022.

These factors pushed Sri Lanka to the edge of bankruptcy. The country now faces a severe economic crisis.

Causes of Sri Lanka’s Economic Collapse

Sri Lanka’s economy crumbled in 2022 due to several factors. Large tax cuts, excessive money printing, and growing foreign debt were key issues. The Gotabaya Rajapaksa government’s tax cuts slashed revenue and worsened fiscal policies.

To cover spending, the Central Bank printed money at record levels. This ignored advice from the International Monetary Fund (IMF). The excess cash led to higher purchasing power and import demand.

As a result, the balance of payments deficit grew. The gap was filled with costly loans from international commercial markets.

Sri Lanka’s Foreign Debt Burden

Sri Lanka’s foreign debt skyrocketed from $11.3 billion in 2005 to $56.3 billion in 2020. It rose from 42% of GDP in 2019 to 119% in 2021. By 2024, external debt reached $37,040 million, 43% of GDP.

The mounting debt and dwindling foreign reserves led to a crisis. In April 2022, Sri Lanka defaulted on its foreign debt obligations.

Year	Foreign Debt (USD Billion)	Foreign Debt as % of GDP
2005	11.3	–
2019	–	42%
2020	56.3	–
2021	–	119%
2024	37.04	43%

Credit Rating Downgrade

The economic crisis led to a downgrade in Sri Lanka’s credit rating. International agencies lowered it to default grade. This made it harder for the country to borrow more money.

The credit downgrade worsened Sri Lanka’s economic troubles. It limited access to global financial markets and increased borrowing costs.

These issues played a major role in Sri Lanka’s 2022 economic collapse. Addressing these problems and implementing reforms is crucial for recovery and future stability.

Sri Lanka Declares Bankruptcy Amidst Severe Economic Crisis in 2022

In 2022, Sri Lanka faced a dire financial situation. Prime Minister Ranil Wickremesinghe declared the country “bankrupt” during an unprecedented economic crisis. The nation’s foreign exchange reserves dropped to $2.31 billion by February.

Sri Lanka owed around $4 billion in debt repayments that year. This included a $1 billion international sovereign bond due in July. The country struggled to meet these obligations.

Foreign reserve depletion left Sri Lanka with less than a day’s worth of fuel. Schools suspended operations, and citizens faced severe fuel shortages. Food insecurity became widespread due to the economic collapse.

Sri Lanka defaulted on its debt for the first time since 1948. The country spent 9.2% of its GDP on foreign debt payments in 2022 alone.

Inability to Pay Foreign Debt Obligations

Sri Lanka’s total debt burden reached $51 billion. The nation owed about $29 billion from July 2021 to 2026. It couldn’t meet debt repayments, including a $78 million coupon payment on two bonds.

Prime Minister Acknowledges Economic Collapse

Wickremesinghe’s bankruptcy statement highlighted challenges in IMF negotiations. Sri Lanka entered talks as a bankrupt nation, not a developing one. This made economic recovery uncertain and difficult.

The crisis deeply affected Sri Lanka’s 21.8 million people. The UN reported that four out of five people now skip meals. Sri Lanka has South Asia’s second-highest child malnutrition rate, after Afghanistan.

Conclusion

Sri Lanka’s financial crisis stems from years of economic mismanagement, excessive debt, and global crises. The country’s GDP shrunk by 7.1% in 2022’s first three quarters. Inflation peaked at 70% in September 2022 but dropped to 54% by January 2023.

The government seeks IMF and international aid to tackle the crisis. Sri Lanka owes $51 billion externally, with 13 banks on rating watch negative. It’s among the world’s biggest loan defaulters, making the IMF bailout crucial.

The UN warns of a looming humanitarian crisis in Sri Lanka. About 500,000 more people now depend on aid. The country faces severe shortages of essentials like food, fuel, and medicine.

The financial crisis has pushed many into poverty. Predictions suggest a 10.9 percent poverty rate by 2021, equal to $3.20 per day.

Sri Lanka must prioritize its citizens’ well-being and address the crisis’s root causes. This includes reforms, improving transparency, and working with international partners. Only then can Sri Lanka build a more stable and prosperous future.

Sri Lanka Names Hans Wijayasuriya as Digital Economy Lead

OMP Sri Lanka has announced a significant step in the country’s digital journey. Dr. Hans Wijayasuriya has been chosen as the Chief Advisor on Digital Economy by the president. This key appointment by President Anura Kumara Dissanayake highlights the country’s dedication to leading in technology. It also shows its efforts to transform its digital space.

Sri Lanka Appoints Axiata GED Hans Wijayasuriya as Chief Digital Economy Advisor

Dr. Wijayasuriya brings a wealth of experience from his time as Axiata Group’s General Executive Director. His global recognition, including the top GSMA Chairman’s Award in 2024, will greatly benefit his new position. With this role, Sri Lanka is starting a new chapter in its digital journey. The aim is to boost growth and improve public services with new technology.

Work on economic recovery is moving forward, and Dr. Wijayasuriya’s vision is expected to be key for empowering Sri Lankans digitally. By taking on this important advisory role, he will wrap up his successful time with Axiata by January 2025. This move marks a major shift from his corporate achievements to serving the nation in the technology field.

Sri Lanka Appoints Axiata GED Hans Wijayasuriya as Chief Digital Economy Advisor

Sri Lanka has made a key move by naming Hans Wijayasuriya the Chief Digital Economy Advisor. This important step is set to boost the country’s role in the digital world and enhance its global standing. It shows Sri Lanka’s eagerness to lead in tech among developing countries.

Appointment Marks a Transformational Shift for Sri Lanka’s Digital Landscape

Dr. Wijayasuriya starts his role on November 1, 2024. He brings vast knowledge, especially from the financial world. This matches well with Sri Lanka’s goals of promoting tech and innovation in telecom. On his first day, the local currency strengthened, showing more investor confidence, particularly in finance.

Empowering a National Vision: Toward a Digitally Advanced Sri Lanka

With Dr. Wijayasuriya’s leadership, Sri Lanka aims to launch major digital updates. These plans are to upgrade infrastructure and make tech widely available, improving living standards and job chances for everyone. His experience in emerging markets and digital fields will likely lead to significant progress.

Public-Private Synergy: Wijayasuriya’s Role in Digital Policy and Advisory

Advancing digitally needs teamwork between the government and private companies. Dr. Wijayasuriya will head the ICTA of Sri Lanka, focusing on starting strong and creating solid policies. His role aims to synchronize Sri Lanka with global digital developments, promoting growth and tech empowerment.

Sri Lanka has also gained major global support, for example, a $1 billion World Bank loan. This shows the world’s trust in Sri Lanka’s recovery and growth plans. It’s a step towards building a vibrant digital economy.

Having Hans Wijayasuriya as the Chief Digital Economy Advisor is crucial for Sri Lanka. His insight and strategy are key to bringing in a digital age of success. He’s expected to blend economic strength with tech innovation seamlessly.

Hans Wijayasuriya’s Legacy in Telecommunications and Digital Solutions

Dr. Hans Wijayasuriya has led for over 30 years in the Axiata Group. He has made a big impact on global mobile communication. This is shown by his GSMA Chairman’s Award in 2024. He now focuses on Sri Lanka’s digital economy growth. By being the Chief Advisor to the President on Digital Economy, his telecommunications expertise will help the country. Sri Lanka faces challenges like the need for skilled software experts which it currently lacks. Dr. Wijayasuriya is key in meeting the IT industry’s growing demands.

To improve the IT workforce, there is a focus on digital innovation. This aims to boost the economy and stop the brain drain by offering good jobs to the young and encouraging them to start businesses. Dr. Wijayasuriya’s work is seen in Dialog Axiata and Axiata Digital Labs. These efforts show his lasting effect on Sri Lanka’s telco and digital areas. He advises the nation to use innovation to enhance international trade. This will help with currency issues and reduce the banking sector’s reliance on the falling rupee.

Sri Lanka is changing its laws, with the 21st Amendment passed. This shows its commitment to fair laws and chances for everyone. The nation is trying to improve in areas like banking and IT. Groups like the Commonwealth Union Ltd. and Appé Lanka help poor communities in Sri Lanka. The President’s Media Division says Dr. Wijayasuriya’s role is very important. As Sri Lanka plans to dissolve its Parliament for elections, it looks forward to new laws and policy changes.