Sri Lanka’s tax collections in the first half of 2023 grew +93% year on year to Rs.697 billion. The income from personal and withholding taxes grew by more than 100% YoY during the period.
The new SSCL tax brought in an additional Rs.80 billion in revenue during 1H-2023. July 2023 CT CLSA SECURITIES in their monthly report also said that the Colombo Bourse closed positive in July, with the benchmark All Share Price Index (ASPI) rising +20.6% MoM to 11,387 points (an increase of 1,944 index points MoM).
Meanwhile, the more liquid S&P SL20 index rose +22.0% MoM to 3,310 points (an increase of 596 index points). Commenting on the Colombo Consumer Price Index (CCPI – Base year 2021) the report said that it has decreased by 2.1 points 190.2 index points, whilst point-to-point inflation was recorded at 6.3% in July 2023 (vs. 12% in June 2023).
The Monetary Board of the Central Bank of Sri Lanka (CBSL), at its meeting held on July 5, 2023, decided to reduce the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by -200bps to 11% and 12%, respectively.
Moving to another positive segment of the economy CT CLSA report said that Tourist arrivals to Sri Lanka increased by +42% MoM to 143,039 tourists in July 2023 (vs. 100,388 tourists in June 2023).
Tourist arrivals from primary source markets (mainly from Europe) have significantly aided the reported progress for the month of July.
The report adds that the industry Outlook is positive, mainly due to the gradual recovery in the economy, the easing of import restrictions, and the expected recommencement of the suspended projects.
However, there are delays in the commencement of many private-sector construction projects due to the downward rigidity of the market borrowing rates.
