• Sri Lanka Purchasing Managers’ Index (Construction) - December 2023

    Construction PMI, as reflected by the Total Activity Index value of 48.6 in December 2023, indicated a slower contraction in construction activities compared to last month. The respondents mentioned that the limited availability of project work continued to hamper the activity levels.

    New Orders declined in December, broadly at a similar pace compared to the previous month. Many respondents mentioned that currently they are heavily relying on foreign-funded projects. Meanwhile, Employment contracted mainly due to the layoffs in line with the project completions. Further, Quantity of Purchases remaind contracted during the month since the ongoing work and the upcoming projects continued to decline. In the meantime, Suppliers’ Delivery Time remained lengthened in Decemeber.

  • The Central Bank of Sri Lanka Maintains Policy Interest Rates at their Current Levels

    The Monetary Policy Board of the Central Bank of Sri Lanka, at its meeting held on 22 January 2024, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 9.00 per cent and 10.00 per cent, respectively. The Board arrived at this decision following a comprehensive assessment of domestic and international macroeconomic developments in order to maintain inflation at the targeted level of 5 per cent over the medium term, while enabling the economy to reach its potential. The Board took note of the effects of the recent developments in taxation and supply-side factors that are likely to pose upside pressures on inflation in the near term. However, the Board viewed that the impact of these developments would not materially change the medium-term inflation outlook. Further, the Board noted the space created by past monetary policy easing measures and the decline in the risk premia attached to government securities for further downward adjustment in market lending interest rates. The Board underscored that the envisaged benefit of further reduction in market lending interest rates needs to be adequately and swiftly passed on to the businesses and individuals by financial institutions.

  • IMF Staff Concludes Visit to Sri Lanka

    An International Monetary Fund (IMF) mission team led by Mr. Peter Breuer visited Sri Lanka from January 11 to 19, 2024 to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the Extended Fund Facility (EFF) arrangement. At the end of the mission, the IMF issued the following press release on 19 January 2024, which can be accessed from the link below.

  • Sri Lanka Purchasing Managers’ Index (Manufacturing and Services) - December 2023

    Both Manufacturing and Services Purchasing Managers’ Indices increased in December 2023

    Manufacturing PMI recorded an index value of 52.7 in December 2023, indicating an expansion in manufacturing activities. This improvement was attributable to the increases observed in all the sub-indices except Employment.

    Services sector PMI recorded an index value of 58.9 in December 2023 indicating an expansion in the services activities. This was led by the increases observed in New Businesses, Business Activities and Expectations for Activity.

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  • CCPI based headline inflation increased in December 2023

    Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100) increased to 4.0% in December2023 from 3.4% in November 2023. This increase in the headline inflation is mostly in line with the projections envisaged by the Central Bank of Sri Lanka (CBSL) in November 2023. 

    After five months of continuous deflation, the Food category recorded inflation (Y-o-Y) of 0.3% in December 2023 from 3.6% deflation (Y-o-Y) recorded in November 2023. Meanwhile, the Non-Food inflation (Y-o-Y) declined to 5.8% in December 2023 from 6.8% in November 2023. Monthly change of CCPI recorded 0.89% in December 2023 due to the combined effect of price increases of 1.16% observed in items of Food category and price decreases of 0.27% observed in the items of Non-Food category. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, decreased to 0.6% in December 2023 from 0.8% in November 2023

  • SL Purchasing Managers’ Index (PMI) for Construction Industry – November 2023

    Construction PMI recorded a Total Activity Index value of 44.3 in November 2023, indicating a contraction in construction activities compared to last month. The respondents mentioned that the low level of new projects and the decline in work related to ongoing projects, as they are in the final stages, hampered the activity levels. 

    New Orders declined at a higher pace in November compared to the previous month. However, many respondents expect an acceleration in awarding of projects, especially government-funded projects, in the first half of the next year. Employment continued to contract as the companies tend to operate with minimum staff under the current industry situation. Further, Quantity of Purchases declined in line with the decrease in construction work. In the meantime, Suppliers’ Delivery Time remained lengthened during the month.

  • External Sector Performance – November 2023

    The trade deficit narrowed in November 2023, compared to a year earlier and October 2023, as a combined impact of an improvement in exports and a compression in imports. Exports recorded a year-on-year growth for the first time since September 2022.

    Monthly workers’ remittances continued to exceed US dollars 500 million and recorded a notable increase in November 2023 compared to the corresponding period in 2022.

    Tourist arrivals soared during the festive season, contributing to high earnings from tourism.

  • The Central Bank of Sri Lanka Releases the Financial Stability Review for the Year 2023

    The Financial Stability Review (FSR) of 2023 encapsulates the developments in the financial system, the risks and vulnerabilities identified thereof, and the policy measures taken by the Central Bank and other regulatory institutions in addressing such risks during the review period, which primarily covers data up to end September 2023. The electronic version of the publication can be accessed through the Central Bank website.

  • Provincial Gross Domestic Product (PGDP) - 2022

    Western, North Western and Central Provinces Continued to Anchor the Sri Lankan Economy

    Western province increased its share in nominal GDP to 43.4 per cent, continuously tightening the grip on the country’s economy during 2022. The strong presence of the Western province is visible in most of the economic activities, especially in Services and Industry sectors. Thereafter, North Western (11.2 per cent) and Central (10.0 per cent) provinces recorded second and third highest shares in the economy, respectively.

  • Sri Lanka Purchasing Managers’ Index (Manufacturing and Services) - November 2023

    Both Manufacturing and Services Purchasing Managers’ Indices recorded an increase in November 2023

    Manufacturing PMI increased to 57.0 on a month-on-month basis in November 2023, driven by the seasonal factors. The index exceeded the neutral threshold after March 2023, with a positive contribution from all the sub-indices.

    Services sector PMI recorded an index value of 59.4 in November 2023 indicating an accelerated expansion in the services activities. This was led by the increases observed in New Businesses, Business Activities, Employment and Expectations for Activity.

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