BOI draws $ 1.8 b in FDIs despite setbacks says Dilum

Sri Lanka has attracted $ 1.8 billion worth of Foreign Direct Investments (FDIs) so far in 2023 despite external and internal setbacks, revealed State Minister Dilum Amunugama yesterday.

The Investment Promotion State Minister said the significant increase in projects is due to the high value of investments in the energy sector. Investments such as Adani Corporation, Sinopec, RM Parks with Shell, and further sectors such as ITC, BPO, Tourism, and Manufacturing are the sectors getting more investments.

Countries such as China, India, US, HK, UAE, France, Korea, Germany and Singapore are the destinations invested during 2023, he added.

According to the State Minister the baseline forecast is for global growth to slow from 3.5% in 2022 to 3.0% in 2023 and 2.9% in 2024, well below the historical (2000–19) average of 3.8%. Due to the Ukraine-Russia war, US and UK inflation is historically 40-45%. Further negative influences due to the Israeli and Palestinian conflict will have repercussions on energy price escalation. 

“In the context of the internal macroeconomic situation, our country’s rating, the default of paying debtors, and political uncertainty send a less investor-friendly signal to the outside world at the beginning of 2022. Yet in 2023 the economy was slowly but steadily pulled back from the worst economic situation post-independence era,” Amunugama said.

He emphasised that the Government’s far-sighted and politically unpopular economic stabilisation measurement has provided a much-needed foundation for reforms in the institutional and regulatory. “This communicated positive signals to our investor community,” Amunugama said. The significant achievement of curbing the acceleration cost of living which has resulted in the single digit of inflation from 74% in September 2022 to 1.5 % in October 2023.

“Yet as an economy, it will continue to contract in 2023, it was better than -7.8 in 2022 but in 2023 it has forecasted -2.0 negative growth. It is an arduous task to attract FDI amidst economic contraction. Yet, in the YOY comparison, BOI registered and approved FDI Investment projects increased by 122% in 2023,” State Minister Amungama added.