Companies categorised as small and medium-sized enterprises (SMEs) constitute around 75% of all businesses in Sri Lanka, making them a crucial component of the economy. Boosting this vital area, both in term of raw size and contribution to value added, is thus a vital part of policy, with recent times seeing major initiatives launched with this goal in mind. June 2018 saw the launch of Enterprise…
Sri Lanka’s third quarter 2018 GDP growth dipped to a record eight-year low of 2.9% – compared to 3.3% in the third quarter of 2017 and 3.7% in the second quarter of 2018 – leading to a cumulative expansion of 3.3% for the first nine months of 2018, which was expected to continue to the end of the year. The struggle was primarily evident in the industrial segment, which rose by a mere…
By the time Sri Lanka reaches the end date of Vision 2025, its current mid-term development plan, it will have been nearly half a century since the country first embraced the ideas of market liberalisation in 1977. Sri Lanka is therefore now in a position to take the long view on liberalisation, having been one of the first post-colonial Asian countries to embark in this direction. However,…
Sri Lanka’s banking sector is currently implementing major changes in the way business is done, due mainly to the rollout of Basel III and International Financial Reporting Standard 9 (IFRS 9) regulations. Stricter capital requirements are pushing non-bank financial institutions (NBFIs) to consolidate, while a host of new rules are being collated for the country’s emerging financial technology…
Ahead of a $1bn sovereign bond maturing in January 2019, Sri Lanka went through a major political crisis during the fourth quarter of 2018, which led to an extensive legal battle. Despite economic data indicating no serious threat to inflation and private sector credit, the heavy liquidity shortage in the market and the uncertain political environment resulted in a spike in domestic yields…
In pursuit of greater energy security, Sri Lankan policymakers have signed three major liquefied natural gas (LNG) deals with the governments of China, India and Japan. Expected to add 1400 MW to installed capacity, the transnational agreements will play a key role in mitigating unreliability in hydropower supply while bolstering foreign capital inflows. Plant Agreements On the back of an…
In an effort to meet rising energy demand and achieve economic objectives, the state-owned oil company Ceylon Petroleum Corporation (CPC) has invited bids to both build a new refinery and modernise existing facilities at the Sapugaskanda plant. Capacity Following a legacy of limited infrastructure investment, Sri Lanka’s sole refinery and primary port-to-refinery pipeline require development.…
Export industries received a welcome boost in May 2017, when the EU reinstated Sri Lanka’s Generalised Scheme of Preferences Plus (GSP+) status, which had previously been rescinded over human rights concerns in 2010. GSP+ status removes the majority of import duties on Sri Lankan goods entering the European single market, providing access to over 500m potential consumers. The move has been…
With a key geostrategic location in the Indian Ocean, international trade is a natural focus for Sri Lanka. The country has signed on to a variety of bilateral and multilateral free trade agreements (FTAs) over the years, with the most recent being the Sri Lanka-Singapore FTA (SLSFTA) in January 2018. Yet, as 2019 began, the SLSFTA ran into a number of challenges, shedding light on the pros…
In September 2017 the Sri Lankan government launched an ambitious development plan, Vision 2025. The eight-year strategy aims to turn the country into an upper-middle-income one “by transforming Sri Lanka into the hub of the Indian Ocean, with a knowledge-based, highly competitive, social market economy”. While the government and the country as a whole have since gone through many tribulations,…
