Economic & Market Bulletin
[August 18, 2005]

	Today's Stories
	FEATURE: Economic & Market Bulletin

A weekly publication of the Economic Affairs Division of the Ministry of Foreign    Affairs
Volume 2:Issue 23 
19^th August 2005 

EU tax break on Sri Lankan imports benefits UK investors

• A tax break given to Sri Lanka by the European Union (EU) in the wake of the Tsunami disaster, designed to help the economy through the difficult recovery phase, also presents benefits to international firms seeking to do business in the country, particularly those from the United Kingdom.

• Under the import tax concessions granted by the EU, which came in to effect on 1^st of July, tax was removed from approximately 200 items, representing approximately 90% of the imports in to EU countries from Sri Lanka.This makes Sri Lankan textiles and garments 12.5% cheaper, and other goods 15% cheaper.

• Around 13%, of Sri Lankan exports are destined for the UK, which in turn supplies a significant proportion of the materials used by Sri Lankan manufactures that are subsequently exported as finished goods. 

MacAndrews enters Sri Lanka with CMA CGM office

• The fast growing container shipping line, MacAndrews, is strengthening its sales and customer service activities in South Asia by establishing an agency in Sri Lanka.

• Its primarily focus will be securing Sri Lankan and South Indian cargoes for MacAndrews’ Indemex Services, which offers fixed day weekly sailings between Sri Lanka, India, the Middle East and the US East Coast.

• Colombo is an important gateway for South Indian cargoes and MacAndrews intends to build its presence among Sri Lankan shippers by rolling out its brand name through the new agency operation. 

World Spice Festival to be hosted by Sri Lanka in October

• The first World Spice Festival, a celebration of food with a difference will be hosted by Sri Lanka. The festival will take place on 7^th –16^th October. The festival will showcase Sri Lanka’s long association with spices, dating back to the 15^th century. 

Record Increase of Arrivals from India

• According to survey by the Research and International Affairs Division of the Sri Lanka Tourist Board (SLTB), Sri Lanka has recorded an increase of tourist arrivals from India in the first half of this year. The tourist flow from India has shown a 42.6% rise this year from January to June.

• SLTB stated that nearly 40% of tourist traffic in to Sri Lanka is generated from the two States of Tamil Nadu and Karnataka. According to statistics that Indian tourist arrivals to Sri Lankan exceeded 100,000.

P&O Nedlloyd will be branded under Maersk Line from February 2006

• After February 2006, Maersk Sealand and P&O Nedlloyd will be branded under the name of Maersk Line.Maersk Logistics and P&O Nedlloyd Logistics will be integrated under the brand name of Maersk Logistics.

• According to the sources P&O Nedlloyd will give notice of withdrawal to specified consortia and conferences. Until February 2006 P&O Nedlloyd and Maersk Sealand will continue to operate as separate shipping lines. This is to offer customers stability of network and services throughout the coming peak season, to keep services and network intact throughout the year, and to honour P&O Nedlloyed’s commitments to various conferences and consortia.  

HCIMA International in Colombo to boost destination; Sri Lanka

• The international conference comprising 150 participants of Hotel and Catering International Management Association (HCIMA) is targeted towards boosting the tourism industry and giving it the necessary enhancement of the image of the country as a holiday destination.  

• The main theme of the conference is “Trends and Challenges in Hospitality Management”.  The session themes would address topics such as: Destination Marketing and Image Building, Special Interest Tourism and Niche Markets, Challenges in the Hospitality Business, Best International Practices in the Hospitality Industry and The Role of Aviation in Tourism.

• This first ever international conference of the HCIMA is jointly organised by the HCIMA, Sri Lanka chapter, the Tourism Ministry, Sri Lanka Tourist Board (SLTB), Ceylon Hotel School Graduates Association (CHSGA), Tourist hotels Association of Sri Lanka (THASL), Sri Lanka Association of Inbound Tour Operators (SLAITO), and Sri Lankan Airlines.  

International Pavilions at Sri Lanka’s Food and Packaging Show

• From the 19 – 21 of August, 2005, Sri Lanka food processors Association in collaboration with the National Agri – Business Council and the Processed Food Development Initiative will launch Pro Foods/Pro Packed for the fourth consecutive year at the BMICH exhibition centre.  This even has attracted over 160 stalls making it the largest food and packaging exhibition in Sri Lanka. 

• Participants from India, Pakistan and Malaysia have booked specialised country pavilion making this year’s event a truly international event.  Food processing and packaging companies will be displaying their latest innovations and sampling out tasty dishes for trade visitors and the general public to obtain first hand information on some of the world’s favourite brands.   

Growth Momentum in the country’s major economic sectors

• According to the Central Bank the growth momentum in the country’s key economic sectors: services, industrial and agriculture was continuing as expected hence it was leaving its policy rates unchanged.  

• Following is the quick check up of economy, which issued Central Bank for August. 

• Recovery in the agriculture sector

• Industrial sector output increased by 5.9% in the first half

• Growth in services sector continuing specially in telecommunication, tourism (arrivals in July increased by 12.3% - 56, 745.), port services and transport.

• Exports increased by 11.5% in the first half

• Imports increased by 10.3% in the first half

• Private remittances increased by 21% in the first half

• Gross official reserves at $ 2.37 billion end June, 2005 from $ 2.19 billion end December, 2005

• Rupee’s appreciation against the US$ 3.6 % year to date

• Point to point change in CCPI (Colombo Consumer’s Price Index) up from 9.4% in June, 2005 to 10.8% in July while in the Sri Lanka consumer price index was down from 13.2 % in May, 2005 to 11.7% in June, 2005.

• Recent tax revisions to stem further inflation

• Soaring oil prices threatening price stability

• Growth in broad money at 20% due to increased credit to public and private sector but expected to moderate with monetary policy measures.

• Commercial Banks have adjusted upwards both lending and deposit rates 

EXCHANGE RATES ON 17^th AUGUST 2005 

 EXCHANGE RATES OF GULF COUNTRIES

 (Source: Financial Times 18^th August 2005)