• Says well-equipped with funds for upcoming elections

The Treasury yesterday (30) confirmed that the Government was well-equipped with ample funds to conduct the upcoming elections scheduled for next year.

Treasury Deputy Secretary R.M.P. Rathnayake highlighted the substantial accumulation of taxes resulting from recent tax revisions as a key factor contributing to the robust financial position.

Speaking to The Sunday Morning, he highlighted that there had been a significant surge in Government revenue collection.

Anticipating a continued upward trend, he pointed to the implementation of new taxes slated to commence on 1 January, foreseeing additional contributions to the Government’s financial reservoir.

“Right now, we are in a good financial position and discussions are currently being held with the relevant stakeholders for the debt restructuring process. Revenue earnings have seen a drastic increase and further growth is expected in the coming year,” Rathnayake said.

Meanwhile, a statement issued by the President’s Media Division last week stated that Sri Lanka had ended 2023 by making payments for all certified expenses – the first year in 25 years that had ended with no arrears.

All approved and certified payments for which bills have been submitted up to 15 December have been paid. Arrears in commuted pensions, which have accumulated for 18 months up to the end of 2022, have also been cleared by 2023. 

Under improvements in public finance management, Sri Lanka was not expected to run arrears under an International Monetary Fund (IMF)-backed programme, the statement said.

As per Central Bank of Sri Lanka (CBSL) statistics, the trade deficit narrowed in October and November 2023 compared to a year earlier, as a result of the 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 $ 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. 

Foreign investments in the Government securities market continued to record a net outflow since July 2023, but remained positive on a cumulative basis during the year. Gross official reserves amounted to $ 3.6 billion by end-November 2023. The Sri Lankan Rupee continued to remain stable against the US Dollar during November 2023.

As highlighted in the CBSL statistics, the gross official reserves were estimated at $ 3.6 billion by end-November 2023. This included the swap facility from the People’s Bank of China equivalent to around $ 1.4 billion, which is subject to conditionality on usability. 

The Central Bank absorbed $ 117 million from the domestic foreign exchange market on a net basis during November 2023. Overall, the Central Bank has purchased around $ 1.8 billion on a net basis during January to November 2023.

Furthermore, the Central Bank in its ‘Financial Stability Overview 2023’ released on Friday (29) has stated that the easing of domestic monetary policy since mid-2023 is anticipated to facilitate the recovery in financial intermediation, which was witnessed through the gradual recovery in banking sector credit during Q3 of 2023. 

This is expected to lead to a rebound in domestic demand and economic activity as witnessed through the modest economic growth recorded in Q3 of 2023, improving income levels and alleviating pressure on the balance sheets of households and firms. 

Moreover, targeted stabilisation of domestic inflation at 5% in the medium-term is expected to enhance the purchasing power of economic agents and improve their debt repayment capacities.

The Election Commission (EC) recently stated that it had submitted a total budget estimate of Rs. 10 billion to the Treasury for three upcoming elections, including the Presidential Election next year.

As per the EC report, the forthcoming Presidential Election is expected to take place between 16 September and 17 October next year, and the anticipated date for the General Election is 2025.

Meanwhile, President Ranil Wickremesinghe recently informed Parliament that both the Presidential and Parliamentary Elections were scheduled to be held next year.

– By Maheesha Mudugamuwa