Economic Capsule April 2010

April 2010 ECONOMIC CAPSULE Commercial Bank of Ceylon PLC Research & Development Unit 

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Economic & Business News Slide Financial Sector News Snippets 19 Analysis & Forecast 20-23 ECONOMIC CAPSULE – April 2010 C O N T E N T S

Back to Contents Economic & Financial Sector News

Back to Contents Research & Development Unit Economic Performance - 2009 ,[object Object],[object Object],3.5% 6.0% 2008 2009 Hotels and restaurants – 13.3% Post and Telecommunication – 11.7% ,[object Object],[object Object],59.4% Agri, Forestry & Fishing Services 12% Industry 28.6% ,[object Object],[object Object],[object Object],Source: Department of Census & Statistics Rubber - 7.9% Vegetables - 7.3% Fishing - 6.9% Other Mining - 18.1% Sector Growth (%) 2009 2008 Agriculture 3.2 7.5 Industry 4.2 5.9 Services 3.3 5.6

Back to Contents Research & Development Unit Budget Further Delayed... ,[object Object],[object Object],[object Object]

Back to Contents Research & Development Unit Sri Lanka - March Tourist Arrivals  53.7% Sri Lanka's March 2010 tourist arrivals  53.7 % to 52,352 from a year earlier . Cont… Arrivals by Top 5 Regions Region % Increase Western Europe 21,797 ▲ 48.6 South Asia 12,801 ▲ 51.7 East Asia 5,438 ▲ 47.5 Eastern Europe 3,421 ▲ 21.8 North America 3,417 ▲ 95.0 Arrivals by Top 5 Countries Country % Increase India 8,607 ▲ 72.1 % UK 8,559 ▲ 30.1 % Germany 5,305 ▲ 96.5 % Maldives 3,160 ▲ 26.3 % France 2,872 ▲ 63.1 %

Back to Contents Research & Development Unit Sri Lanka - March Tourist Arrivals  53.7% (cont…) Tourism Highlights 2010 ... ,[object Object],[object Object],[object Object],[object Object],[object Object]

Back to Contents Research & Development Unit BOI Targets USD 5 bn for Next Six Years ,[object Object],[object Object],[object Object],[object Object],According to the Board of Investment it had recently approved and signed agreements for eight new investments worth USD 20 mn that will create 500 job opportunities Company Project Type Amount (USD mn) Nilwala Vidulibala Mini-hydro power plant - Morawaka 3.28 Bogo Power Mini hydro-power plant - Norwood 5.50 Aitken Spence Hotels Refurbish and upgrade Neptune Hotel - Beruwala 4.0 Stafford Hotel Refurbish and upgrade Club Dolphin -Waikkal. 4.40 Thampa Tourist Hotel and Inn. 25-room hotel - Vavuniya 0.50 Jugas Agro Dairies Dairy Business - Chenkalady-Batticaloa. 1.50 B F P Enterprises Process banana fibre into value-added products for export - Hambantota 0.50 Hambantota Trading Company An export trading house - Koggala Export Processing Zone. 0.50 Total 20.18

Back to Contents Research & Development Unit External Sector Performance – January 2010 USD Mn Imports, Exports & Trade Balance 2005-2009 Category January 2009 US$ mn January 2010 US$ mn Change (%) Exports 491.1 472.0 -3.9 Agricultural 101.0 142.5 41.1 Industrial 385.1 319.9 -16.9 Mineral 5.1 9.6 88.3 Imports 682.6 1,160.9 70.1 Consumer Goods 154.0 233.5 51.6 Intermediate Goods 333.8 625.1 87.3 Investment Goods 183.3 219.0 19.5 Balance of Trade -191.5 -688.9 -259.8 Workers’ Remittances 258.0 289.8 12.3

Back to Contents Research & Development Unit Inflation - April, 2010 ,[object Object],[object Object],[object Object]

Back to Contents Research & Development Unit Aid Support ADB/Japan ADB Amount ,[object Object],[object Object],Purpose ,[object Object],[object Object],Interest ,[object Object],[object Object],[object Object],[object Object]

Back to Contents Research & Development Unit Credit to the Private Sector ▲ ,[object Object],[object Object],[object Object],[object Object]

Back to Contents Research & Development Unit Greece Debt Crisis ,[object Object],[object Object],The Bailout Package ,[object Object],[object Object],[object Object],[object Object],Greece reached agreement with the IMF, the European Commission, and the European Central Bank (ECB) on a focused program to stabilize its economy, become more competitive, and restore market confidence with the support of a €110 billion (about $145 billion) financing package. Cont…

Back to Contents Greece Debt Crisis (Cont…) Timeline of Greek Crisis Research & Development Unit Below is a brief summary of some of the main events in the Greek Sovereign debt crisis. Cont… Back to Contents ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Research & Development Unit Cont… Timeline of Greek Crisis (Cont…) Back to Contents ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Research & Development Unit Timeline of Greek Crisis (Cont…) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Back to Contents Source: IMF, Wikipedia

Back to Contents Financial Sector News

Back to Contents Research & Development Unit Licensed Banks Taking Steps to Open Branches in the Northern and Eastern Provinces ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],According to the Central Bank of Sri Lanka, several licensed banks are showing a keen interest to facilitate economic activities in the Northern and Eastern provinces. Accordingly; North  Mankulam, Mannar, Paranthan, Tunukkai, Atchchuvely, Kilinochchi, Mallavi & Manipay East  Akkaraipattu, Kaluwanchikudy & Valachchenai

Back to Contents Research & Development Unit Branch Openings 173 @ Kalmunnai 174 @ Manipay 175 @ Majestic City (Holiday Banking Centre) 133 @ Kundasale 134 @ Kollupitiya 135 @ Gangodawila 39 Batticaloa (365 day Banking Centre) 136 @ Peliyagoda 137 @ Hanwella Commercial Bank Sampath Bank Pan Asia Bank 37 @ Jaffna Nations Trust Bank

Economic Performance - 2009 SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPE SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Share Price Movement of CBC, HNB, Sampath & Seylan ,[object Object],[object Object],[object Object],End of war Back to Contents ,[object Object],[object Object],[object Object],Sampath Bank 1Q Profits  (Group) 31.03.10 % PBT 852.53 13.8 PAT 604.52 52.2 Deposits 132,758.78 5.4 Gross L&A 103,343.13 3.7

Back to Contents Analysis & Forecast

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Research & Development Unit ANALYSIS & FORECAST World Economic Outlook 2010 Source: IMF, World Economic Outlook 2010 Asian-5 1 - Indonesia, Malaysia, Philippines, Thailand & Vietnam Back to Contents Cont… 2008 2009 2010 2011 World Output 3.0 -0.6 4.2 4.3 Advanced Economies 5.0 -3.2 2.3 2.4 United States 0.4 -2.4 3.1 2.6 Euro Area 0.6 -4.1 10.0 15.0 Japan -1.2 -5.2 1.9 2.0 United Kingdom 5.0 -4.9 1.3 2.5 Developing Asia 7.9 6.6 8.7 8.7 China 9.6 8.7 10.0 9.9 India 7.3 5.7 8.8 8.4 Asian-5 1 4.7 1.7 5.4 5.6

ANALYSIS & FORECAST - Medium Term Macroeconomic Framework Back to Contents Cont… Research & Development Unit Indicators Projections Real Sector Units 2008(b) 2009 (c) 2010 2011 2012 2013 GDP at Market Prices Rs. bn 4.411 4,825 5,445 6,202 7,064 8.009 Real GDP Growth % 6.0 3.5 6.5 7.5 8.0 8.0 Inflation-GDP Deflator % 16.3 5.7 6.0 6.0 5.5 5.0 Total Investment %of GDP 27.6 24.5 27.8 29.5 32.0 33.0 Domestic Savings %of GDP 13.9 18.0 18.6 20.4 23.0 24.2 National Savings %of GDP 17.8 23.9 24.2 26.3 29.2 30.4 External Sector Trade Gap US$ mn -5,981 -3,122 -4,874 -5,588 -6,307 -7,042 Exports US$ mn 8,111 7,085 8,094 9,067 10,197 11,528 Imports US$ mn 14,091 10,207 12,968 14,655 16,504 18,571 Services (net) US$ mn 401 391 517 695 837 996 Current Account Balance US$ mn -3886 -214 -1,642 -1,638 -1,642 -1,766 Current Account Balance % of GDP -9.5 -0.5 -3.5 -3.1 -2.7 -2.6 Overall Balance (d) US$ mn -1,385 2,725 700 967 902 970 External Official Reserves (Months of Imports) (d/e/f) Months 1.4 6.0 5.3 5.5 5.5 5.0 Debt Service Ratio (g) % 15.1 19.0 14.5 15.3 19.8 18.5

ANALYSIS & FORECAST - Medium Term Macroeconomic Framework (a) Based on the information available by mid March 2010. (b) Revised (c) Provisional (d) Values for 2008 were revised due to a change in the classifi cation of external assets. (e) Excluding receipts of Asian Clearing Union. (f ) External offi cial reserves from 2010 onwards include the expected proceeds from the IMF Stand-by Arrangement facility 2009. (g) Total debt service payments as a percentage of earnings from export of goods and services. (h) Year-on-year growth in end year values. Source: CBSL Annual Report - 2009 Back to Contents Research & Development Unit Indicators Projections Fiscal Sector Units 2008(b) 2009 (c) 2010 2011 2012 2013 Revenue & Grants % of GDP 15.6 15.1 15.4 16.6 17.5 17.6 Expenditure & Net Lending % of GDP 22.6 24.9 23.0 23.1 22.5 22.4 Current Account Balance % of GDP -2.0 -3.6 -1.9 0.4 1.0 1.2 Overall Budget Deficit % of GDP -7.0 -9.8 -7.5 -6.5 -5.0 -4.8 Domestic Financing % of GDP 7.1 5.0 5.1 3.5 3.4 3.5 Financial Sector (h) Reserve Money Growth % 1.5 13.1 13.5 14.0 13.9 13.4 Broad Money Growth (M2b) % 8.5 18.6 13.5 14.1 14.0 13.5 Narrow Money Growth (M1) % 4.0 21.4 7.5 8.1 8.0 8.0 Growth in Credit to Private Sector % 7.0 -5.7 13.2 15.1 17.3 17.2 Growth in Credit to Public Sector % 48.8 13.1 7.4 5.1 0.6 -1.5

The information contained in this presentation has been drawn from sources that we believe to be reliable. However, while we have taken reasonable care to maintain accuracy/completeness of the information, it should be noted that Commercial Bank of Ceylon PLC and/or its employees should not be held responsible, for providing the information or for losses or damages, financial or otherwise, suffered in consequence of using such information for whatever purpose. The views expressed in Economic Capsule are not necessarily those of the Management of Commercial Bank of Ceylon PLC “ The emergence of the *BRICs as aid donors is as important for poor countries as was the fall of the Berlin Wall for Eastern Europe”. Deborah Brautigam * In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries") is a grouping acronym that refers to the related economies of Brazil, Russia, India, and China. Back to Contents

Economic Capsule April 2010

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Economic Capsule April 2010