Business
Govt and Central Bank in a mood for fiscal consolidation
by Sanath Nanayakkare
A recap of remarks at a recent webinar hosted by the Central Bank of Sri Lanka made it evident that both fiscal and monetary authorities are in a mood for increased tax collection and reduced public spending in the medium term in order to reduce the burgeoning budget deficit in 2021.
Responding to a question from the audience whether the policymakers would take a path of revenue based consolidation in this backdrop, Mahinda Siriwardana, Deputy Governor of the Central Bank said,” You can see that as per the medium term policy framework presented by the Central Bank, revenue is expected to increase gradually and at the same time overall expenditure is expected to go down. It will be a kind of combination of revenue enhancing and expenditure reduction measures as has been announced by the government.”
“As a result, the expectation is to have improvements in both the Current Account and the Primary Account going forward. So these could be the main driving forces in the future in order to reduce the budget deficit, So I’d say the mechanism will be a combination of these two metrics.”
“There was an increase in the budget deficit in 2020. It reflected two things. There was a decline in revenue and at the same time there was an unexpected increase in the recurrent expenditure due to the ongoing pandemic. You know that the government introduced significant changes to the country’s tax policy in 2019 – the idea behind that was to encourage the economic activity. By maintaining a low tax regime in the country. However, the expectations were not entirely met given the subsequent developments, particularly due to Covid-19 and related developments. There was a 3.6% contraction in the economy. That had an impact on the expected revenue generation. At the same time there was an overrun in the recurrent expenditure as well. So the response to your question is in the Central Bank’s medium term framework,” the Deputy Governor said.
According to the Annual Report of the Central Bank, due to the economic fallout from the COVID-19 pandemic, the fiscal outcome deviated from expectations as reflected in the decline of the government revenue and a rise in government recurrent expenditure, thereby widening the budget deficit and raising the outstanding central government debt. Heavy reliance on domestic sources in financing the budget deficit in 2020 reflected the impact of extremely challenging global market conditions that limited access to foreign financing, and the expressed preference of the government to reduce the reliance on foreign financing.
Despite the limited fiscal space in 2020, the government, under extremely challenging circumstances, continued to support the businesses and individuals affected by the pandemic. Going forward, near term risks to the fiscal sector could remain elevated due to low revenue mobilisation and the large foreign currency debt service requirements. Persistent deviations of the budget deficit and the elevated level of outstanding central government debt warrant a firm commitment towards fiscal consolidation as envisaged in the National Policy Framework of the government, the CBSL Annual Report states.
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
