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Business Recorder
6 days ago
- Business
- Business Recorder
Crisis-hit Sri Lanka vows reforms as growth slows
COLOMBO: Sri Lanka's president on Monday vowed to press ahead with unpopular reforms, including the closure of loss-making state institutions, as official data showed economic expansion slowing down. President Anura Kumara Dissanayake said maintaining the country's 1.5 million-strong public service was unsustainable and that there would be cutbacks. Addressing an IMF-backed review of the country's economic recovery from the unprecedented meltdown of 2022, the leftist president said he has identified several state institutions to be shut down. 'We have already decided that certain state institutions should be closed,' Dissanayake said, without naming them. 'These institutions were established in response to the socio-economic needs of a bygone era, which are no longer relevant.' Sri Lanka to discuss with IMF about measures to attract foreign investment, president says He added that the government would retain its hold on the energy and financial sectors, which he considered 'sensitive to the economy.' Dissanayake's remarks came as the census department said the country's economy expanded by 4.8 percent in the first quarter of this year, down from 5.4 percent in the previous quarter and 5.3 percent a year ago. The island's worst economic performance was in 2022, when GDP shrank by 7.3 percent after the country ran out of foreign exchange to finance even the most essential imports such as food and fuel. After two consecutive declines in GDP in 2022 and 2023, Sri Lanka's economy recorded positive growth of 5.0 percent in 2024, indicating the country was emerging from its worst crisis. Months of shortages led to street protests that eventually forced then-president Gotabaya Rajapaksa to step down in July 2022. His successor, Ranil Wickremesinghe, secured a $2.9 billion, four-year bailout loan from the IMF. However, Wickremesinghe lost the September elections to Dissanayake, who has done a U-turn on his election pledges to renegotiate the terms of the bailout and has maintained austerity. Dissanayake said he was committed to reforms in line with the International Monetary Fund's prescriptions and hoped it would be the island's last bailout. The current IMF bailout is its 17th. 'By the year 2028, we aspire to build a stable economy with sufficient growth to service our debt independently,' he said. Dissanayake has signed off on a controversial debt restructuring his predecessor had agreed with both bilateral and private creditors.
Kuwait Times
13-06-2025
- Business
- Kuwait Times
Sri Lanka raises electricity price in line with IMF bailout
COLOMBO: A train arrives at a station in Colombo.- AFP COLOMBO: Cash-strapped Sri Lanka on Wednesday announced a 15 percent increase in the electricity price to shore up revenues for the state-run utility, in line with conditions imposed by an IMF bailout. The Public Utilities Commission said it allowed the Ceylon Electricity Board (CEB) to charge the higher rates from Thursday, six months after a controversial reduction that pushed the utility into the red. The government had forced a 20 percent price cut on the CEB in January, despite fears that it would cause the government-owned company to lose money and undermine the national budget. Ensuring cost-recovery and doing away with subsidies is in line with the conditions set by the International Monetary Fund, which granted a four-year, $2.9 billion loan to help salvage Sri Lanka's economy. The country had declared bankruptcy after defaulting on its $46 billion foreign debt in April 2022, having run out of foreign exchange to finance even the most essential imports, such as food, fuel and medicines. Months of protests over shortages led to the toppling of then-president Gotabaya Rajapaksa in July 2022. His successor, Ranil Wickremesinghe, secured the IMF bailout and proceeded to cut subsidies and raise taxes. Wickremesinghe lost the September election, but his successor, Anura Kumara Dissanayake, is pushing ahead with the IMF-backed reforms. Inflation, which peaked at nearly 70 percent in September 2022, has dropped sharply, and the country has been experiencing deflation since September. The IMF says Sri Lanka is slowly emerging from its worst meltdown and that the economy has turned around, although risks remain.- AFP
Qatar Tribune
12-06-2025
- Business
- Qatar Tribune
Sri Lanka raises electricity price
Agencies Cash-strapped Sri Lanka on Wednesday announced a 15 percent increase in the electricity price to shore up revenues for the state-run utility, in line with conditions imposed by an IMF bailout. The Public Utilities Commission said it allowed the Ceylon Electricity Board (CEB) to charge the higher rates from Thursday, six months after a controversial reduction that pushed the utility into the red. The government had forced a 20 percent price cut on the CEB in January, despite fears that it would cause the government-owned company to lose money and undermine the national budget. Ensuring cost-recovery and doing away with subsidies is in line with the conditions set by the International Monetary Fund, which granted a four-year, $2.9 billion loan to help salvage Sri Lanka's economy. The country had declared bankruptcy after defaulting on its $46 billion foreign debt in April 2022, having run out of foreign exchange to finance even the most essential imports, such as food, fuel and medicines. Months of protests over shortages led to the toppling of then-president Gotabaya Rajapaksa in July 2022. His successor, Ranil Wickremesinghe, secured the IMF bailout and proceeded to cut subsidies and raise taxes. Wickremesinghe lost the September election, but his successor, Anura Kumara Dissanayake, is pushing ahead with the IMF-backed reforms. Inflation, which peaked at nearly 70 percent in September 2022, has dropped sharply, and the country has been experiencing deflation since September. The IMF says Sri Lanka is slowly emerging from its worst meltdown and that the economy has turned around, although risks remain.
The Sun
11-06-2025
- Business
- The Sun
Sri Lanka raises electricity price in line with IMF bailout
COLOMBO: Cash-strapped Sri Lanka on Wednesday announced a 15 percent increase in the electricity price to shore up revenues for the state-run utility, in line with conditions imposed by an IMF bailout. The Public Utilities Commission said it allowed the Ceylon Electricity Board (CEB) to charge the higher rates from Thursday, six months after a controversial reduction that pushed the utility into the red. The government had forced a 20 percent price cut on the CEB in January, despite fears that it would cause the government-owned company to lose money and undermine the national budget. Ensuring cost-recovery and doing away with subsidies is in line with the conditions set by the International Monetary Fund, which granted a four-year, $2.9 billion loan to help salvage Sri Lanka's economy. The country had declared bankruptcy after defaulting on its $46 billion foreign debt in April 2022, having run out of foreign exchange to finance even the most essential imports, such as food, fuel and medicines. Months of protests over shortages led to the toppling of then-president Gotabaya Rajapaksa in July 2022. His successor, Ranil Wickremesinghe, secured the IMF bailout and proceeded to cut subsidies and raise taxes. Wickremesinghe lost the September election, but his successor, Anura Kumara Dissanayake, is pushing ahead with the IMF-backed reforms. Inflation, which peaked at nearly 70 percent in September 2022, has dropped sharply, and the country has been experiencing deflation since September. The IMF says Sri Lanka is slowly emerging from its worst meltdown and that the economy has turned around, although risks remain.
Business Recorder
03-06-2025
- Business
- Business Recorder
KSE-100 hits all-time high as investors cheer IMF breakthrough
A day after shedding over 800 points, bullish momentum returned to the Pakistan Stock Exchange (PSX) on Tuesday, as the benchmark KSE-100 Index settled at a new all-time high of 120,450. A buying spree was observed throughout the trading session, pushing the KSE-100 Index to an intra-day high of 120,693.83. At close, the benchmark index closed on 120,450.87, an increase of 1,573.07 points or 1.32%. 'Market participants showed positive sentiments today, following Prime Minister Shehbaz Sharif's statement that talks with the International Monetary Fund (IMF) over the upcoming federal budget had been successful,' Waqas Ghani, Head of Research at JS Global, told Business Recorder. Prime Minister Shehbaz Sharif said on Monday that talks with the International Monetary Fund (IMF) over the forthcoming federal budget had been successful, paving the way for a new phase of economic growth. The premier, while talking to a select group of journalists, said the government had stabilised the economy and would now shift its focus toward sustained development. Meanwhile, Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company (Private) Limited, said that the government's adherence to IMF-backed reforms has 'led to sustainable economic growth'. Moreover, investor confidence also comes on the back of a continued earnings momentum across key sectors and a more stable outlook, he added. On Monday, PSX witnessed a volatile session on the first trading day of the week, as early bullish momentum was wiped out by heavy late-session selling, finally, the benchmark index closed into negative territory. The benchmark KSE-100 index shed 813.29 points or 0.68% to close at 118,878 points. Internationally, Asian shares edged cautiously higher on Tuesday while the dollar fell to a six-week low as erratic US trade policies clouded markets and investors turned defensive ahead of key developments later in the week. US President Donald Trump and Chinese leader Xi Jinping will likely speak this week, White House press secretary Karoline Leavitt said on Monday, days after Trump accused China of violating an agreement to roll back tariffs and trade restrictions. The call between the two leaders will be closely watched by markets to see if the tariff-induced blow to global stocks and the dollar this year could get some reprieve or ratchet up, as trade tensions between the world's two largest economies simmer. Data on Monday showed US manufacturing contracted for a third straight month in May, and suppliers took the longest time in nearly three years to deliver inputs amid tariffs. The gloomy global trade situation left US futures falling early in the Asian session, failing to sustain the slight gains made during the cash session on Wall Street overnight. Nasdaq futures and S&P 500 futures were both down 0.2% each. In Europe, EUROSTOXX 50 futures advanced 0.28% and FTSE futures added 0.15%. MSCI's broadest index of Asia-Pacific shares outside Japan reversed early losses to last trade 0.6% higher, while Japan's Nikkei rose 0.66%.
