Economy

Especially, tax revenue increased by LKR 1,700 Bn in the first six months of 2024. That is a growth of 42.6%. We have been able to achieve a growth of 44.7% of the annual estimate. Also, non-tax revenue has increased by 30.4%. A target of 52.7% of the annual estimate has been reached.

If the VAT concession had not been granted, the salaries of government employees could be raised by Rs. 30,000 per month. That is the truth.

Even today, our country is running on the foreign currency sent by you [Sri Lankans living overseas]. […] our country has gas, fuel, and medicines, firstly because of the foreign exchange you all send, and secondly, because we are not repaying debt [at present]. 

By the end of the 2023 financial year, the losses of SriLankan Airlines amounted to LKR 609 billion […] Every family in this country, […] has been placed in a position where they have to pay LKR 107,000.

By the end of 2022, the current account deficit of the balance of payments was 1.9% of the GDP. We were able to achieve a surplus in the current account of the balance of payments by the end of 2023. This was the first time since 1977 that a surplus was achieved in the current account of the balance of payments.

When considering the Ministry of Defence, we spent 7% of the total budget for 2022 on it [Ministry of Defence] ... 60% of that goes to pay wages…Sri Lanka is one out of ten countries that has the greatest number of soldiers per 100 citizens. If we take 200 countries, we are in the first 10. Sri Lanka is a country that has around 1.5 soldiers for every 100 citizens.

We put the Central Bank there [in charge] without meddling in it. Henceforth, according to the law, we won’t be able to print money. We have lost our ability to borrow (obtain loans) from the Bank of Ceylon and the Peoples' Bank. Although it is tough, we have taken these steps to control inflation.

[…] In the [EPF] Act itself it specifies 2.5% return. […] at the time inflation was at around 1 percent, if you look at 5 years prior to 1958, the average would have been 1 percent. […] Over the years, some years have been positive, and some returns have been negative in terms of real returns. Last year the EPF return on a real basis was -47%. […]

In addition to the provident fund of the general public, CBSL also maintains a separate provident fund for its officers […] CBSL invested its funds in places where it could get the highest returns and credited an interest of 29% from the [its] provident fund to the accounts of its officers. Yet, the general public was only given a paltry interest of 9% after [the CBSL]…

The IMF has not imposed a condition saying to restructure domestic debt. ….. That being the case, who has intimidated us to the point of doing this? What has happened is that foreign bondholders – sovereign bondholders – have imposed a condition saying that if their debt is restructured…then, something similar must also be done to domestic debt.

…. the Fiscal Management Responsibility Act No. 3 of 2003…had three main goals…to maintain the budget gap below 5%..... reducing public debt as a percentage of GDP to 65% by 2013, that is, in 10 years…. reducing the amount that the government guarantees when borrowing to 4.5% of GDP…..today the budget gap is at levels such as 10%, 12%, and the amount of public debt has gone up to more than 125% of the GDP. The guarantee for public debt has gone up to 15%...

The majority of Sri Lanka’s domestic debt is in treasury bonds. We have [almost 9,000 billion] worth of treasury bonds….44.5% of that is in banks….43% was borrowed from EPF & ETF

Programme financing gaps: debt service reduction during 2023-27 should be sufficient to close external financing gaps. Under staff baseline scenario, US$17 billion in debt service reduction is required, including the arrears accumulated in 2022 So, we are trying to get a 17 billion debt reduction on that side. Do you want it or not.

Sri Lankan migrant workers’ foreign remittances increased to US$ 568.3 million in March 2023 from US$ 318.4 million in March 2022. This is a 78.5% (US$ 249.9 million) increase compared to the inflows recorded in March 2022.

The total base money printed in 2021 was Rs. 344 billion, whilst the net basis reserve money issued in 2022 was below Rs. 40 billion.

In 2019, there were 1.5 million income tax files in total…when we abolished the PAYE tax, in December 2021, we [only] had 400,000 income tax files. It reduced from 1.5 million to 400,000.

In other countries, most of the taxes are collected from a higher income bracket. In 2021, in India – 50% direct tax…Bangladesh – direct tax 32%...Nepal – direct 31%....69%. Indonesia – direct tax 40%...Vietnam – direct tax 31%...Thailand – direct taxes 37%...Malaysia – direct tax 66%...However the situation in our country is different. In 2021, our direct tax was 21% while indirect was 79%. We should take action to rectify this tax divergence. Then, the tax burden on the general public will be reduced.

The government being the owner of around 80 percent of land will take measures to facilitate access to land with suitable utilities for domestic and foreign investment.

In 2021, 19% of the total tax revenue was received from tobacco and alcohol.

By 2001, export earnings as a percentage of the gross national product stood at around 33%. It is now less than 15%.

The government had reportedly agreed with the IMF to reach a primary account surplus of 2.3% of GDP by 2025. However, the primary account had dropped to around (6%) of GDP during the tenure of President Gotabaya Rajapaksa...It would be a monumental feat to bring the primary account to a surplus of 2.3% of GDP.

By December 2021, government institutions have borrowed more than Rs. 1 trillion.

While Sri Lanka Railways earned a revenue of Rs. 2.6 billion in 2021, it had to pay Rs.7.8 billion just for salaries and wages.

The loss of SriLankan Airlines in the year 2020-2021 alone is Rs. 45 billion. By 31st March 2021, the total loss was at 372 billion.

Some people in the present government say that the country has come to this situation because we [yahapalana government] took loans. 80% of the loans we took were used for settling the loans obtained by Mahinda Rajapaksa’s government.

An Extended Fund Facility (EFF) - which allows longer repayment periods - may be best suited to the country, it typically requires deeper structural reforms. 

Foreign remittances increased during the first 5 months of 2021. It increased by USD 450Mn. However, it started to drop from the sixth month onwards… This January, it [remittances] reduced by 62%.

We [Sri Lanka] have the highest inflation in Asia as of now.

Compared to 2019 and 2021, the decrease in foreign reserves is 80% in Sri Lanka. But other countries in the [South Asian] region have seen an escalation of their reserves.

It was in 1950 that we entered into an agreement with the IMF to obtain its membership. As a member country, from 1960 until now, we have carried out certain transactions with the IMF on 16 occasions. I recall that 2.5 billion dollars was obtained in 2008 during President Mahinda Rajapaksa’s tenure. That was the largest loan obtained from the IMF thus far.

[Local] milk production is still only around 40 per cent of the total requirement.

Sri Lanka has lost Rs. 20 billion as a result of the sugar scam.

The tourism industry has collapsed completely following the Easter Sunday attacks and following this COVID-19 pandemic. Due to the collapse of the tourism industry, we have lost USD 5 billion per year that the country should have received.

The fisheries industry contributes to 1.1% of Sri Lanka's GDP, according to the 2019 CBSL report.

Industries occupy a special place in the national manufacturing process in Sri Lanka which is about 26.4% of the national GDP, and only a very low percentage of about 10% contributes to exports.

CBSL Annual Report states Sri Lanka's budget deficit for 2020 [was a] huge 11%. But it should be even higher at 14%.

There has been a big outflow of foreign investment from the stock exchange. In terms of rupee value Rs. 51 billion outflows was registered in the year 2020…

We had USD 8.2 billion in reserves… When the good governance government handed us the government, there was only USD 7.6 billion in reserves.

"The Postal Department is currently running at a loss of about Rs 6 billion. It generates an income of Rs 8 billion annually. The department’s expenditure runs to about Rs 14 billion on account of having overtime payments, the salaries and other costs."

The banking sector remains strong with total capital adequacy ratio above 16 per cent, net stable funding ratio above 130 per cent, liquidity coverage ratio above 175 per cent and statutory liquid asset ratio above 32 per cent. With these performance indicators, I do not think anyone needs an additional assurance on the current strength of the banking system.

In 2018 the income the country received from overseas workers was about USD 7 billion. That was 7.9% of that year’s GDP.

When President Mahinda Rajapaksa took over the country in 2005, the Gross Domestic Product (GDP) was USD 20 billion. In ten years, we increased the GDP to USD 80 billion.

"…ICT/BPM, electronics, printing and packaging services – alone contributes to around $1.3 billion in export revenues every year."

The Ceylon Electricity Board (CEB) and Ceylon Petroleum Corporation (CPC) incur losses in the tens of millions [of rupees] per day.

Sri Lanka’s tourism sector accounts for 5% of gross domestic product.

When he took office in 2015, there were 1.5 million tourist arrivals and in 2018, it increased to 2.3 million.

"During the past 2 months, the rupee has appreciated by 2.5%."

The tea industry adds $1.5 billion to the economy of this country and the rubber industry adds $0.8 billion.