logo
Sri Lanka's inflation turns negative at -1.7% for November

Sri Lanka's inflation turns negative at -1.7% for November

Express Tribune23-12-2024

Listen to article
Sri Lanka's inflation rate dropped to minus 1.7% year-on-year in November, following a decrease to minus 0.7% in October, according to official data released on Monday.
The drop marks a significant recovery for the country after enduring its worst financial crisis in decades. The National Consumer Price Index (LKNCPI), which tracks broad retail price inflation, showed food prices remained stable at 0.0% in November, down from 1.3% in October.
Prices in the non-food category fell to minus 3.1%, an improvement from minus 2.3% in the previous month.
Analysts attribute the decline in inflation to various factors, including reductions in power tariffs, fuel prices, and the appreciation of the Sri Lankan rupee. This marks the lowest inflation rate Sri Lanka has seen in nine years, signaling the stabilization of its economy.
Shehan Cooray, head of research at Acuity Stockbrokers, noted that inflation is expected to remain at these levels for the first two months of 2025. However, he also cautioned that if foreign exchange pressures arise, particularly from resumed vehicle imports, inflation could gradually rise, though it is unlikely to exceed 4%.
Sri Lanka experienced record inflation in 2022, largely due to a financial crisis triggered by a sharp decline in dollar reserves.
The country began to stabilize after securing a $2.9-billion bailout from the International Monetary Fund (IMF) in March 2023. Following the low inflation rate, Sri Lanka's central bank set a new policy rate of 8% last month, easing monetary settings to support further economic recovery.
Sri Lanka's economy is projected to grow by 4.5-5% in 2024, slightly surpassing the World Bank's estimate of 4.4%, according to central bank data.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Aurangzeb to present federal budget 2025-26 today
Aurangzeb to present federal budget 2025-26 today

Business Recorder

time2 hours ago

  • Business Recorder

Aurangzeb to present federal budget 2025-26 today

Finance Minister Muhammad Aurangzeb would present the federal budget for the upcoming fiscal year 2025-26 on Tuesday (today), as the coalition government seeks to revive the economy, meet the International Monetary Fund (IMF) measures and provide some relief to the tax-weary masses. The budget, expected to have an estimated outlay of Rs17.6 trillion, comes at a time when the global economy remains engulfed in uncertainty fueled by new trade tariffs being imposed by the United States. Finance Minister Aurangzeb, who will deliver his second budget speech in the National Assembly, will also lay the Finance Bill 2024 in the Senate on the same day, as required under Article 73 of the Constitution. Some areas of interest: GDP growth target External financing estimates Taxation on the salaried group PSDP size and focus Broadening the tax base Defence budget The budget comes a day after the government missed its GDP growth target of 3.6% in the outgoing fiscal year, posting a figure of 2.7%, as revealed in the Economic Survey 2024-25. However, Aurangzeb, during his press briefing while unveiling the Pakistan Economic Survey 2023-24, highlighted a strong 4.8% rebound in industrial activity, pushing the economy's size to $411 billion for the first time and raising per capita income to $1,824.

Pakistan likely to hike defence spending but slash overall budget in 2025-26
Pakistan likely to hike defence spending but slash overall budget in 2025-26

Business Recorder

time3 hours ago

  • Business Recorder

Pakistan likely to hike defence spending but slash overall budget in 2025-26

ISLAMABAD: Pakistan will unveil its annual federal budget for the coming fiscal year later on Tuesday, seeking to kickstart growth while finding resources for an expected hike in defence expenditure following the conflict with India last month. Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund programme and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market. Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7% from this fiscal year. It has projected a fiscal deficit of 4.8% of GDP, against a targeted 5.9% deficit in 2024-25, the reports say. Analysts said they expect an increase of around 20% in the defence budget, likely offset by cuts in development spending. Pakistan allocated 2.1 trillion Pakistani rupees($7.45 billion) for defence in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defence budget. India's defence spending in its 2025–26 (April-March) fiscal year was set at $78.7 billion, a 9.5% increase from the previous year, including pensions and $21 billion earmarked for equipment. It has indicated it will step up expenditure following the May conflict with Pakistan. The government of Pakistani Prime Minister Shehbaz Sharif has projected 4.2% economic growth in 2025-26, saying it has steadied the economy, which had looked at risk of defaulting on its debts as recently as 2023. Growth this fiscal year is likely to be 2.7%, against an initial target of 3.6% set in the budget last year. Economic Survey 2024-25: Pakistan misses growth target Pakistan's growth lags far behind the region. In 2024, South Asian countries grew by an average of 5.8% and 6.0% growth is expected in 2025, according to the Asian Development Bank. Rate cuts not enough Expansion of the economy should be aided by a sharp drop in the cost of borrowing, the government says, after a succession of interest rate cuts by the central bank. But economists warn that monetary policy alone may not be enough, with fiscal constraints and IMF-mandated reforms still weighing on investment. Finance Minister Muhammad Aurangzeb said on Monday that he wanted to avoid Pakistan's boom and bust cycles of the past. 'The macroeconomic stability that we have achieved, we want to absolutely stay the course,' he said. 'This time around we are very, very clear that we do not want to squander the opportunity.' The budget is expected to prioritize expanding the tax base, enforcing agriculture income tax laws, and reducing government subsidies to industry, to meet the terms of a $7 billion IMF bailout signed last summer. Just 1.3% of the population paid income tax in 2024, according to the tax authorities, with agriculture and the retail sector largely outside of the tax net. The IMF has urged Pakistan to widen the tax base through reforms which include taxing agriculture, retail, and real estate. Ahmad Mobeen, senior economist at S&P Global Market Intelligence, said that he expected the revenue target for 2025-26 will be missed. 'The shortfall will mostly be owing to lack of optimal implementation of announced measures as well as absence of meaningful structural reforms to widen the tax net in general,' said Mobeen.

Sri Lanka shares gain
Sri Lanka shares gain

Business Recorder

time8 hours ago

  • Business Recorder

Sri Lanka shares gain

COLOMBO: Sri Lankan shares ended higher on Monday, supported by gains in consumer staples and communication services. The CSE All Share index rose 0.6% on Monday to 17,500.24. Eight of the eleven sub-sectors ended higher on Monday, with consumer staples leading gains with a 1.2% rise. Consultancy and support service provider Hela Apparel Holdings and renewable energy supplier Panasian Power were the top two percentage gainers on the CSE All Share, rising 5.9% and 5%, respectively. Trading volume on the CSE All Share index fell to 121.8 million shares from 189.2 million in the previous session. The equity market's turnover slid to 2.85 billion Sri Lankan rupees ($9.5 million) from 4.22 billion rupees in the previous session, according to exchange data. Foreign investors were net sellers, offloading stocks worth 106.7 million rupees, while domestic investors were net buyers, purchasing shares worth 2.76 billion rupees, the data showed.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store