By Paul A Ebeling Jr
An international bank and rating agency have warned that Sri Lanka’s economy faces slower growth and stronger external pressures in the year ahead, said reports released Thursday.
Minister Economic Development - Basil Rajapaksa
Although the Sri Lankan government will likely continue to make gradual progress in reducing its deficit, the debt burden will remain high, the report from Moody’s Investors Service NYSE:MCO,said. “The absence of a new funding program is credit negative from the perspectives of external payments and growth,”the rating agency said.
Moody’s views were contained in a just-released report, titled “Sri Lanka; The Post-IMF Backdrop: Downward Growth Pressures and Elevated External Pressures”.
The special comment examines the credit implications of Sri Lanka’s (B1/Positive) decision on 12 February to not seek a new funding program from the IMF, following the successful completion of a US$2.6-B Stand-by Arrangement in Y 2012
Moody’s believes the Sri Lankan government will continue to reduce gradually its budget deficit, but the composition of deficit reduction will be key.
Supplier cash arrears, weak structural revenue reform and contingent liabilities in the state owned enterprise sector are concerns. Moreover, high inflation and rapid credit growth are risks to macroeconomic stability, Moody added.
Standard Chartered Bank LN:STAN, PINK:SCBFF, it was less optimistic of Sri Lanka’s growth rebound for multitude of factors and lowered improvement in Y 2013 GDP forecast to 6.7 from 7.7% previously.
“We see three reasons for a slower-than-expected recovery as the economy adjusts to bold Central Bank policy measures aimed at addressing growing imbalances: (1) more fiscal consolidation is required; (2) inflation is elevated, limiting room for near-term policy easing; and (3) the recovery in Sri Lanka’s main trading partners, the EU and US, remains slow,”the bank report said.
Courtesy Live Trading News
Dr.Rajasingham Narendran / March 15, 2013
Living here in Sri Lanka, no international agency need to tell me that something is seriously wrong with the economy. The cost of living is unbearable. The impending increase in electricity charges,is bound to be crippling. Homes in Colombo are virtually in the dark at night. There is no savings to be made anymore. The housing sector is dead. Business is down. The political and government sector orruption is being increasingly recognized as a major problem and resented. The gloom can be felt everywhere except the traffic congestion on he roads. One fuel dealer told me fuel sales have not declined. However, the automobile sector is barely kept alive by the duty free permit system for imports. The president is employing unemployed graduates in to the government and banking sector, where there is no need for them. The government is also a unbearable burden on the economy.
The government will be brought down by the poorly performing economy and the cost of living than by other issues such as the abysmal law and order situation and declining standards of governance. However, the president has yet the gratitude of the people for defeating the LTTE. The Sunday Times last week reported that a women in Mahiyangana told the president, ‘Yes, the cost of living is high, but we are living without fear’. This feeling of gratitude will evaporate soon, if the cost of living increases further.
Dr.Rajasingham Narendran
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Kaliamma / March 15, 2013
This joker only knows how to increase his personnel wealth through corrupt deals and selling government assets which are belong to poor SL. I wonder how he become a minister for economic development even not being able to pass GCE OL
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mohamed fazly ilyas / March 15, 2013
We Srilankan citizens with a near 90% literacy rate can see and understand this. But, sadly a group of about 10% who should know,dont know this!
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saman / March 19, 2013
Ithink otherway around?
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Mahela / March 16, 2013
Rajapakses are playing a Hambanthota comedy show to the world and public. Children bringing flowers, kneeling before him, bringing children to Araliya gaha Medura and asking front of opposition leader what they want and calloing over Phone to GA to make a Bridge for them etc. These are all DRAMA TO DUPE PUBLIC AND THE WORLD.
I COULD ONLY LAUGH WHEN SKELETON LOOKING WOMEN SAY THEY ARE HAPPY WITH ENDING WAR WHEN PRICES HAVE TREBEL AFTER THE WAR.
From people protesting in front of Supreme court during CJ Shirani Bandaranayake’s impeachment up to to recent fun trip with “VESAK NADE” anteraj of over 100 and taking over 20 member camera crew to Japan for Video and photo-ops with Japan’s Prime Minister are all part of that Drama……while skeletal looking children, elderly looking women and kasippu “moonshine” drinking men used to promote Maharaja is all part of his Hambanthota Drama.
Rajapakse drama will unfold pretty soon when people start rising over cost of living,electricity and gas bill, health, education, unemployment, UNHCR sanctions etc.
While knowing that Norochcholai Chinese Power station broke down 12 times in first year, now Chinese built airport in Mattala bringing down every nut and bolt upto heavy Machinery, conveyor belts, equipments, telecommunication equipments, service equipments etc..etc..are all our money drainers.How about service and repair costs of these equipments….. Reperuccassions of bad judgments will be frelt later when the Maintenance and repairs come into light.
According to Basil Rajapakse last year (2012) there had been 6 million arrivals to Sri Lanka. That means THERE SHOULD BE 50 PLANES landing every day 365 days during last year.But according to flight schedule at BIA only 30 planes land average per day.
http://www.airport.lk/flight-info/flight-schedule-arrival.php
So how come Basil Rajapakse say we got 6 million visitors per year….Is this another Rajapakse Drama show. Can Basi Rakapakse answer to above question as to where this 6 million arrived last year……….
Only if they know we are from COLOMBO and not Medamulana Joker’s village.
There should be a limit to Rajapakse Drama comedy show to dupe public.
MEANWHILE WE WAIT TO SEE NEXT RAJAPAKSE ” VESAK NADE” ANTERAJ JOKERS GOING TO GO……..AND THE QUANTITY OF THAT NADE……
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Contango / March 19, 2013
Hamma thota and Raja passa, sucx.
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saman / March 19, 2013
Cant you undestand, Basil and Gota American Citicens. This is thier jobs. They want to earn money as much as possible to live in America. Even they earn lots of money in rupess, in dollers not much. They have to pay taxes to American government and they have to maintain all properties in America. So Sri Lanka is thier farm. People are thier animals. Unfortunately we have elected them as our masters.So if you want you can live as an animal in thier farm or leave the country??
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Mark / March 17, 2013
We have a shiny new airport. We will host CHOGM in Hambugntot. Enough to keep some of the yakkos fooled for a little longer. Problem is the airport wont pay for itself for a long time. But the Chinese will want the loan paid on time. Same with the port and all the other stuff built in the pocket boro. Has any credible explnation been given as to why the CEB looses so much money after the commissioning of Lakvijaya.
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Roshan / March 17, 2013
Proud to be Srilankan????
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Safa / March 17, 2013
High debt and continuous borrowing without any plan or hope of paying back.
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Contango / March 19, 2013
true dat, dese politicians are thiefs, how can you expect them to pay it back, our fools who voted are there to repay the debts.. happy fools day.
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monkey / March 18, 2013
Oh really very interesting since I wonder what this rating agency said about cyprus because just today in order to cover the bailout package to prop their flagging economy, all account holders in cyprus now have to pay the cyprus govt upto 10% of their cash that is their accounts, all account holders in the country! as a one off payment.
So these loudmonths at the UNHRC better pay attention to the massive austerity in the EU countries and the problems there for the citizens than trying to harrass sri lanka for no reason.
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Jayantha / March 18, 2013
We have to secure our country before Rulers feed us with Punnakku (coconut scrape) and Thanakola (Grass).
Waiting and waiting until Rulers taking country down precipee, while doing nothying is a far more worst crime.
Now the country is run with Black money, drugs, kasippu, gambling and ME labour money. For how long is anybody’s guess. But the fall is inevitable.
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Contango / March 19, 2013
This is what happend when a donkey becomes a Minister.
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