Headline inflation as measured by the year-on-year (Y-o-Y) change in the National Consumer Price Index (NCPI, 2013=100) decreased to 5.2 per cent in November 2020 from 5.5 per cent in October 2020. This was due to the statistical effect of the high base prevailed in November 2019. Meanwhile, Food inflation (Y-o-Y) decreased to 9.4 per cent in November 2020 from 10.6 per cent in October 2020, whereas Non-food inflation (Y-o-Y) increased to 1.7 per cent in November 2020 from 1.5 per cent in October 2020.
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NCPI based Inflation decreased in November 2020
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Provincial Gross Domestic Product - 2019
Nestling the commercial and administrative capital of the country, Western province continued to be the forerunner of the economy. However, its share declined, contributing to narrowing of regional disparity.
Western province secured the largest share (39.1 per cent) of the country’s nominal GDP. However, due to improved contribution from the other provinces, the share declined by 0.5 per cent from 2018. Central (11.5 per cent) and North Western (10.7 per cent) provinces were ranked at second and third positions, respectively.
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Appoinment of New Deputy Governors
The Monetary Board, with the concurrence of the Hon. Minister of Finance, has promoted Assistant Governors, Mrs. T M J Y P Fernando and Mr. N W G R D Nanayakkara to the post of Deputy Governor of the Central Bank of Sri Lanka (CBSL) with effect from 14th December 2020.
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Sri Lanka Purchasing Managers’ Index - November 2020
PMI for Manufacturing sector expanded in November 2020, while PMI for Services sector edged up compared to the previous month yet remained below the threshold level.
Manufacturing PMI bounced to 57.6 in November 2020 with an increase of 17.3 index points compared to October 2020. The significant increase in new orders, particularly in the manufacture of textile & wearing apparel and food & beverages sectors, has mainly contributed to thisconsiderable improvement. Increase in Production sub-index, mainly on account of the manufacture of textile & wearing apparel and non-metallic mineral products sectors, together with lengthening of the Suppliers' Delivery Time across all sectors have alsocontributed to the overall increase in the Manufacturing PMI.
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External Sector Performance - October 2020
In October 2020, Sri Lanka’s external sector exhibited its resilience with the successful repayment of the matured International Sovereign Bond (ISB) of US dollars 1.0 billion. During the month, external sector performance was supported by the continued improvement in the trade deficit, increase in workers’ remittances and the resultant stability in the domestic foreign exchange market. While imports continued to be restrained under low global oil prices and import restrictions imposed by the Government, exports dropped in October 2020 due to the disruptions to local production and support services following the resurgence of COVID-19 cases since early October and weak demand from foreign buyers. Workers’ remittances continued to record a year-on-year growth during the month.
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Response to the Downgrade of Sri Lanka's Rating by S&P Global Ratings
Following the announcement by S&P Global Ratings downgrading Sri Lanka’s Sovereign rating, the Ministry of Finance has issued a response, which can be found on the link below:
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Extension of the validity period to open Special Deposit Accounts and permission to retain funds held in such accounts in Sri Lanka
The Government of Sri Lanka (GOSL) introduced the Special Deposit Accounts (SDAs) on 08 April 2020 to seek assistance for the national effort to overcome the effects of COVID-19 outbreak in the country. Accordingly, as at 07 October 2020, total deposits in SDAs amounted to approximately USD 272 million.
Considering the potential of SDAs to attract a substantial amount of foreign exchange into the country and the resultant positive impact on the foreign currency reserve position of the country and the overall economy, GOSL has decided to extend the validity period of opening SDAs up to 07 April 2021 on recommendation of the Monetary Board of the Central Bank of Sri Lanka.
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CCPI based Inflation increased to 4.1 per cent in November 2020
Headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100) increased marginally to 4.1 per cent in November 2020 from 4.0 per cent in October 2020. This was driven by monthly increase of prices of items in both Food and Non-food categories. Meanwhile, Food inflation (Y-o-Y) increased marginally to 10.3 per cent in November 2020 from 10.0 per cent in October 2020. Non-food inflation (Y-o-Y) also increased marginally to 1.6 per cent in November 2020 from 1.3 per cent in October 2020.
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Withdrawal of Appoinment of Natwealth Securities Limited as a Primary Dealer
Having considered a request made by NatWealth Securities Limited (NWSL), the Monetary Board of Central Bank of Sri Lanka decided to withdraw the appointment granted to NWSL to function as a Primary Dealer, with effect from 4.30 p.m. on 30.11.2020.
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Response to the Downgrade of Sri Lanka’s Rating by Fitch Ratings
Following the announcement by Fitch Ratings downgrading Sri Lanka’s Sovereign rating, the Ministry of Finance has issued a response, which can be found on the link below: