FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



Latest topics

» Related party transactions in Banks cause concerns
by ChooBoy Yesterday at 10:59 pm

» Daily Foreign Transactions
by Pradeep90 Yesterday at 10:24 pm

» Japanese money laundering via PABC Bank raise CB eye brows
by Lotus Eater Yesterday at 9:34 pm

» Principal governmental and regulatory policies that govern the banking sector in Sri Lanka
by Lotus Eater Yesterday at 9:18 pm

» Ban of chemical fertilizers is a great news
by ADVENTUS Yesterday at 6:29 pm

» DIPD/HAYC/HAYL
by ADVENTUS Yesterday at 1:11 pm

» Peoples leasing technically positive Target Price Rs 20
by Eranx Yesterday at 11:30 am

» PEOPLE'S LEASING & FINANCE PLC
by Eranx Yesterday at 11:29 am

» "MFL" DEAL to 12 RS (multi finance plc)
by Bakka1988 Thu May 06, 2021 11:22 pm

» FUTURE of BROWNS INVESTMENT PLC (BIL)
by ONTHEMONEY Thu May 06, 2021 11:21 pm

» GLAS will be winner with Super Gain.
by Promoney Thu May 06, 2021 10:30 pm

» What happens in the market is absolutely 100% out of your control. Stock market for beginners
by Asoka Samarakone Thu May 06, 2021 9:45 pm

» Synergies of possible merger between Sampath Bank and PABC
by CHRONICLE™ Thu May 06, 2021 5:42 pm

» ACCESS ENGINEERING ( AEL.N )
by ADVENTUS Thu May 06, 2021 1:50 pm

» Prime Lands Residencies Limited (PLR)
by Nandun Thu May 06, 2021 10:42 am

» EXPOLANKA HOLDINGS PLC (EXPO.N0000)
by Captain Wed May 05, 2021 11:51 pm

» Growing Fear
by Wickyz Wed May 05, 2021 8:15 pm

» CONGRATULATIONS TO FINANCIAL CHRONICLE ON THIS 11TH YEAR
by CHRONICLE™ Wed May 05, 2021 3:31 pm

» HNB to merge with Seylan Bank?
by reyaz Wed May 05, 2021 11:37 am

» There are howmany funds in Sri Lanka?
by reyaz Tue May 04, 2021 4:52 pm

EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Economy on stronger footing; weighed down by high budget deficit, inflation risk concerns

Economy on stronger footing; weighed down by high budget deficit, inflation risk concerns

Go down  Message [Page 1 of 1]

K.Haputantri

K.Haputantri
Co-Admin
Economy on stronger footing; weighed down by high budget deficit, inflation risk concerns
December 5, 2012, 8:00 pm
The Island

Less than a week after the release of a global report highlighting Sri Lanka’s economic prospects for next year (see The Island Financial Review Friday November 30), Standard Chartered Bank yesterday (05) released a more detailed report on the domestic economy. It said the economy was on a stronger footing, but raised concerns over inflation and the already high fiscal deficit.

"We expect 7.2% growth in 2013 (slightly lower than the budget estimate of 7.5%), supported by a pick-up in investment, strong remittance inflows, and steady growth in the construction and tourism sectors. Weak demand from Sri Lanka’s key export markets, the EU and the US, is likely to persist, but overall demand should pick up in 2013 as the global recovery gathers momentum. The finance minister highlighted that exporters’ margins have deteriorated due to weak global demand but that exporters had benefited from exchange rate flexibility. Export earnings, at an estimated USD 9.5bn for 2012, are modest (c.6% lower than in 2011) but have exceeded expectations despite the downturn in Sri Lanka’s export markets," Standard Chartered Bank economists Ms. Samantha Amerasinghe and Nagaraj Kulkarni said in the latest report.

"The trade balance is likely to remain in deficit as demand for investment goods increases to support growth. However, we expect an improvement in the current account (to 4.5% of GDP in 2013 from an estimated 6.1% in 2012) as exports recover, supported by robust remittance inflows and tourism receipts. The balance of payments should remain in surplus, but there is substantial risk from higher oil prices (oil accounts for c.25% of Sri Lanka’s total imports), which could exacerbate the fiscal position."

"The high fiscal deficit and the risk of higher inflation due to the possible escalation of food prices are key concerns. The deficit has been under strain due to lower-than-expected tax revenues and higher debt interest payments. The increase in non-interest expenditure on wages and welfare spending has also contributed to fiscal slippage. For 2012, the government maintains that it will achieve its 6.2% deficit target, but we think it will be closer to 7% of GDP. Headline CPI inflation is likely to inch higher in Q4-2012 due to upward revisions of administered prices of fuel (and electricity) and supply-side constraints (Cyclone Nilam damaged crops in the northeast in early November). However, we expect inflation to moderate by Q2-2013 due to improved domestic supply and buffer stocks of rice, while the government’s prudent wage policy should suppress near-term wage demand pressures. We think this will provide the central bank with sufficient flexibility to cut policy rates by 25bps in Q1-2013. In 2013, the policy focus is likely to shift to supporting growth," the report said.

Standard Chartered Bank says balancing the budget would be a tough act.

"The 2013 budget remains development-oriented while maintaining the government’s fiscal consolidation stance. The government projects ambitious revenue growth of 19.2% (versus a 12.8% increase for 2012), and plans to increase expenditure by 15.9%. We note that while the expected pick-up in revenue growth in 2013 (to 14.7% from 14.2% of GDP in 2012) is insignificant, expenditure – at 20.5% of GDP – is unchanged.

"The government expects tax revenue growth of 22.9%, while non-tax revenue is projected to fall by 6.1%. Tax collection is expected to increase versus 2012 levels, at 13% of GDP. The government plans to increase infrastructure spending by 20.2% and expenditure on education and health by 28.4%, and to boost subsidy spending by LKR 35.9bn (though, as a percentage of total expenditure, it will remain flat at 15%). Interest costs, at LKR 444.8bn, remain the largest recurrent expenditure item, increasing by 12.9% versus 2012, but are flat as a percentage of total expenditure, at c.25%.

"For 2013, the government continues to focus on development and remains resolute in its efforts to tackle the twin deficits – trade and fiscal. The overall thrust of the 2013 budget is poverty alleviation and food security, but there is a strong emphasis on import substitution (in industries such as sugar, dairy, and livestock and fisheries), enhancing export competitiveness (tea, rubber, coconut and spices), and on sectors defined as key drivers of economic growth and new sectors such as IT and business process outsourcing (BPO). Import levies on dairy products, canned fish and milk powder have been increased to protect domestic industries."

K.Haputantri

K.Haputantri
Co-Admin
Sri Lanka expects BOP surplus of US$ 380mn in 2012
December 5, 2012, 8:01 pm
The Island

LBO: Sri Lanka is expecting a ‘balance of payments’ surplus of 380 million US dollars in 2012 the latest Central Bank projection said, down from a 1.25 billion US dollar projection in May.

For 2013 the Central Bank is projecting a BOP surplus of 780 million US dollars, according to a presentation made by Central Bank Governor Nivard Cabraal to executives of Sri Lanka’s finance companies Monday.

A so-called BOP surplus roughly corresponds to an increase in Central Bank’s foreign reserves adjusted for items such as valuation changes.

Foreign reserves can increase steeply if there are reserves are captured and locked by a sell down of Central Bank’s Treasury bill stock preventing the converted rupee proceeds from being spent, either directly by the recipients or others through credit.

Foreign reserves fall rapidly in the Central Bank prints money by purchasing large volumes of Treasury bills either to finance a deficit budget or to continuously sterilize foreign exchange sales.

During the last balance of payments crisis, the Central Bank held Treasury bill stock rose from almost zero to around 240 billion rupees.

In the absence of a sell down of T-bills reserves will increase by the equivalent increase in domestic reserve money or interest earnings on forex reserves and any International Monetary Fund receipts which occur outside the domestic monetary system.

The Central Bank’s Treasury bill stock has been roughly stable at around 200 to 220 billion rupees from May until the first week of December and credit growth has been positive.

A balance of payments surplus is a legacy term dating back to the gold standard era when gold accumulated as a domestic asset in country when credit growth was low.

In modern paper fiat money systems, where gold is insignificant all inflows go out either as transactions by people, the government or reserve investments by the Central Bank and the balance of payments balance almost exactly.

But Central Bank monetary movements are considered ‘below the line’ and labeled as a balance of payments ‘surplus’, though the money has already moved out of the country usually to be invested in gilts of reserve currency countries.

The Central Bank is projecting a deficit in the current account of the balance of payments to narrow to 5.1 percent of gross domestic product in 2012 from 7.6 percent in 2011.

In May the Central Bank expected the current account to narrow to 3.8 percent of GDP, in 2012 despite projections of large inflows through the capital account.

A large surplus in the capital account (not counting IMF inflows) however generates a roughly equal deficit in the current account if bank credit is positive and there is no sell down of Central Bank held Treasury bills.

In 2013, the Central Bank is projecting the current account of the balance of payments to narrow to 3.6 percent of GDP.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum