The British exit from the European Union would negatively affect Sri Lankan economy as fluctuation in the share markets in Europe and Asia had begun to occur in the wake of the Brexit, Deputy Foreign Affairs Minister Dr. Harsha de Silva said yesterday.
Dr. De Silva said the instability of the British economy and devaluation of the sterling pound would negatively affect our exports as 35 per cent of the Sri Lankan export to Europe was going to Britain.
“Our exports to Europe is 30 per cent and 35 to 40 per cent of it is going to Britain. Even if we obtain GSP+, we would not be able to gain the full advantage of it as we would not b able to export to Britain without export duty,” he said.
Dr. De Silva said the Sri Lankan Ambassador to Britain yesterday handed over the documents necessary to gain GSP+ in Brussels and the decision regarding it could be expected within six months and added that Rs. 25 billion loss had been incurred due to the non-availability of the GSP+ during the past years.
He said the instability of the British economy would also affect tourism industry in Sri Lanka as 25 per cent of the tourist arrivals from Europe were from Britain.
“The British tourists are the ones who spend most in Sri Lanka and the collapse of the Pound will result in their purchasing power,” he said.
He said the Brexit would also negatively affect the cost of servicing the foreign loans that had been obtained by Sri Lanka as the US$ would increase in the world market and added that the loan interest in the world market would increase, which would affect negatively in obtaining commercial loans.
Dr. De Silva said due to the instability in the British economy, Britain would have to reach in trade agreements with most countries and that Sri Lanka would also have to fast track trade agreement with India, China and other countries in such a situation.
When asked about the campaign by some Sri Lankan politicians against the Brexit, he said they had discussions only with Sri Lankans living there and that it was informal and added that it was not in support of British Prime Minister David Cameron. (Ajith Siriwardana)
What do we export to China? There is a huge trade imbalance between Sri Lanka and China in China's favor.
upali Wednesday, 29 June 2016 10:41 AM
Then why the phone In a hurry to sign the deal with India via DM Android App
chandu Wednesday, 29 June 2016 10:43 AM
OK offering yet a another excuse for bad financial management.Stock market has been down much before Brexit.
Bingo Wednesday, 29 June 2016 10:49 AM
What's your point? Brexit or Brenter, SL already screwed by UNP/SFLP polittocs.. If your young and educated get the hell out of SL. I dont see any hope with UNP/SLFP.
Wildwine Wednesday, 29 June 2016 11:29 AM
Asian Markets as well as US has rebound within a couple of days. Effect of BREXIT is not as bad as expected (in reality); though politicians are trying to exaggerate its effect. It is not even close to GFC 2008. In a couple of weeks things will return to normalcy. SL economy is resilient; it survived a 30 year civil war, so please do not try to paint a picture as if the world is coming to an end.
nihal Wednesday, 29 June 2016 12:31 PM
Wow... Brexit for the rescue... cat is out of the bag and India is fishing on troubled water !
Aquarius Wednesday, 29 June 2016 01:19 PM
Very true. That 95% are happy to be the frogs in the well all their lives.
manu Wednesday, 29 June 2016 02:16 PM
Hello Harsha then tell this PM there is no need sign the economic pack with India.
CitizenPerera Wednesday, 29 June 2016 02:35 PM
Britain in this century has not been "Great" at all. For our exports to depend on a weak UK economy for trade itself is/was a bad move. We need to diversify our markets. No government has succeeded in doing so because our manufacturing and service industries are not competitive with other countries even within South Asia.
kk Wednesday, 29 June 2016 03:57 PM
all is well via DM Android App
Missaka Wednesday, 29 June 2016 07:53 AM
Okay, we knew that, our government has excellent excuses.
BuffaloaCitizen Wednesday, 29 June 2016 08:00 AM
Almost 95% in Sri Lanka do not know what is Brexit leave alone whether UK exited from the EEC. However all this 95% know and acknowledge "Sinha Le". This is this countries standard of people.
Roman Wednesday, 29 June 2016 09:01 AM
nf Wednesday, 29 June 2016 09:09 AM
We would've been better off if we stayed with 'CHINA' instead of bankrupt 'Europe'!
L. Perera Wednesday, 29 June 2016 06:11 PM
Sri Lanka will stagnate at current levels for a very long time. The chemistry is not quite right .
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.