Tourism, Factory Restarts Temper Sri Lanka Economic Contraction | Canada News Media
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Tourism, Factory Restarts Temper Sri Lanka Economic Contraction

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(Bloomberg) — Sri Lanka’s economy likely shrank at a slower pace last quarter as a rebound in tourism and some industrial activity were the bright spots in a country grappling with still-elevated borrowing costs and higher taxes.

The gross domestic product probably contracted 8.9% in the three months to March from a year ago, according to a median estimate of economists in a Bloomberg survey. That’s better than a 12.4% contraction in the previous quarter, the most in two years. The statistics department will issue the data around 3 p.m. Thursday.

“The recovery in tourism and remittances likely have helped offset some of the consumption weakness,” said Thilina Panduwala, head of research at Frontier Research in Colombo. “Since the start of the year, most of the new taxes have begun to be collected, especially income taxes, putting further downward pressure on consumption.”

The island nation’s economy that saw its worst crisis in seven decades is turning a corner. Visitors to the Asian nation have risen, with tourism receipts estimated to have gained 18% to $696 million in January to April from a year ago, according to central bank data.

“A rebound in tourism, on the back of an easing of border controls in China, has provided a boost,” said Gareth Leather, economist at Capital Economics.

He said arrivals should continue to grow over the coming months, forecasting the economy to expand by 2.5% in 2023 following a 7.8% fall in 2022. Tourism generally accounted for 5% of Sri Lanka’s GDP before the pandemic.

The Purchasing Managers’ Indices showed an expansion in March due to increased new orders and production in the food and beverage sector ahead of the local new year festival.

Imports of fuel and fertilizer have rebounded after Sri Lanka clinched a $3 billion International Monetary Fund bailout in March this year. While the inflows helped to reduce the widespread food and gasoline shortages, it has come at a bit of a cost as Sri Lanka had to increase income taxes and interest rates to clinch the funds.

Debt Talks

Inflation has cooled for four straight months as a result, giving the monetary authority the space to unexpectedly cut its benchmark rate in June for the first time since July 2020 to support the nation’s recovery.

Sri Lanka’s currency is one of the best performers so far this year with the influx of tourists and still-elevated interest rates, but this may not be enough. Investors want to see whether the government can effectively restructure its debt in line with IMF criteria to keep unlocking funds under the program.

The IMF sees Sri Lanka’s economy returning to growth next year as fresh funding is received and local authorities implement reforms to strengthen its fiscal health and price stability.

What Bloomberg Economics Says…

“We expect the economy to grow 0.8% in 2023 after shrinking 7.8% in 2022. A tourism rebound, falling borrowing costs, fast-cooling inflation and more aid from the International Monetary Fund will probably help drive the recovery.”

—Ankur Shukla, South Asia economist

For the full note, click here

The nation is yet to finalize its debt overhaul strategy that would be a blueprint to advance negotiations with creditors. Analysts are also predicting tough times ahead for the rupee as the government eases import restrictions and debt repayments loom.

–With assistance from Tomoko Sato, Asantha Sirimanne and Ronojoy Mazumdar.

 

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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