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

The construction industry continued to perform at a subdued level in July 2023, recording a Total Activity Index value of 43.2. As per the respondents, most firms remain hibernated amid the challenging industry environment. However, the gradual decline in material cost had provided a conducive environment for the limited ongoing projects. Further, some temporarily suspended government-funded projects resumed at a modest scale during the month.

The New Orders contracted, yet at a slower rate in July. Many respondents highlighted that tendering opportunities are mostly limited to foreign-funded projects, while private clients are still waiting for further reductions in cost. Moreover, sub-contract openings are also scarce as firms with projects in hand possess extra capacities. Meanwhile, Employment decreased further during the month since firms tend to retain only the key staff. Further, Quantity of Purchases continued to decline during the month as most of the firms are in a wait-and-see stance, only fulfilling the short-term requirements. In the meantime, Suppliers’ Delivery Time broadly remained stable during the month, and some respondents mentioned that supplier credit facilities are also becoming available.

The sentiment amongst the firms towards the next three months broadly remained positive, mainly due to the expected recovery in the economy, the decrease in interest rates and material costs, and current negotiations on the recommencement of  suspended governmentfunded projects.

Raising Awareness on Domestic Debt Optimisation Programme

During a protest held by a group of persons, who claimed themselves as representatives of the members of the Employees’ Provident Fund (EPF), today, i.e., on 28th August 2023 near Colombo Fort Railway Station against the potential impact to EPF due to the implementation of the Domestic Debt Optimisation programme (DDO), the said group of persons through the Colombo Fort Police Station requested for a meeting with the officials of the Central Bank of Sri Lanka (CBSL) to discuss the matters pertaining to DDO and EPF. In response to the said request, the Governor of the CBSL, through the officials of the Colombo Fort Police Station, has informed the said group of persons that a meeting will be convened today itself at 2.30 p.m. at the CBSL premises with five persons representing the said group of persons. However, after communicating the details of the meeting, the said group of persons has informed the CBSL through the Colombo Fort Police Station of their inability to participate at the meeting.

Public Complaints on Unlawful Pyramid Schemes

The Central Bank of Sri Lanka (CBSL) has recently received many public complaints indicating that some schemes operating through online platforms are misleading investors into depositing money/investing in these schemes by stating factors such as indicated below, in an attempt to justify that they are lawful schemes: 

  • The scheme is protecting investors’ funds by adhering to the regulations of CBSL;
  • The scheme is paying the relevant taxes to the Government; 
  • Participants of the schemes have to pay a personal income tax from their funds to CBSL, in order to withdraw funds and if not, their funds would be frozen by CBSL; 
  • The scheme has had discussions with CBSL.

CBSL strongly denies the above statements and wishes to inform the public that there is no truth in these statements. 

The list of institutions licensed and regulated by CBSL is included in the CBSL website and the website of the Foreign Exchange Department and can be accessed through the following links. 

The Central Bank of Sri Lanka maintains policy interest rates at their current levels

The Monetary Board of the Central Bank of Sri Lanka, at its meeting held on 23 August 2023, 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 11.00 per cent and 12.00 per cent, respectively. The Board arrived at this decision following a careful analysis of current and expected developments in the domestic as well as the global economy, while noting the significant easing of monetary conditions effected since June 2023. The Monetary Board took note of the downward adjustment of market interest rates in response to monetary policy easing measures implemented thus far and the need to allow space for further adjustment of market interest rates swiftly. However, the Board observed that market interest rates of certain lending products remain excessive and are not in line with the current monetary policy stance. Moreover, the Board anticipates a faster reduction in overall market lending interest rates in line with the recent monetary policy easing measures.

Release of ‘Economic and Social Statistics of Sri Lanka – 2023’ Publication

‘Economic and Social Statistics of Sri Lanka – 2023’, an annual publication of the Central Bank of Sri Lanka, is now available for public access.

Statistics Department of the Central Bank of Sri Lanka publishes this booklet, which consists of statistical tables categorised under eight major areas, i.e. ‘National Accounts’, ‘Economic and Social Infrastructure’, ‘Prices, Wages and Employment’, ‘External Trade and Finance’, ‘Government Finance’, ‘Money and Capital Markets’, ‘Financial Sector’ and a section including statistics of other countries. This publication will be a useful collection of information for those who are interested in socio-economic statistics.

The English version of this publication is available in electronic form and can be accessed through the Central Bank website (http://www.cbsl.gov.lk).

Land Valuation Indicator – First Half of 2023

Land Valuation Indicator (LVI) for Colombo District recorded 215.3 during the first half of 2023 with a year-on-year increase of 15.2 per cent. All sub-indicators of LVI, namely Residential, Commercial and Industrial LVIs contributed to the overall increase with annual increases of 17.2 per cent, 15.1 per cent and 13.5 per cent, respectively. On semi-annual basis, LVI increased by 4.9 percent during the first half of 2023, compared to the second half of 2022. The highest contribution to this increase was from Residential LVI followed by Commercial and Industrial LVIs. However, a deceleration of the semi-annual growth of LVI could be observed during the first half of 2023.

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