Sri Lanka and Pakistan have signed the FTA to boost bilateral trade some time in the past, but it did not achieve the desired results. To boost bilateral trade,Pakistanis invited Sri Lanka to visit and see the beautiful country. The High Commissioner also invited the business community to participate in the SAARC country exhibition scheduled to be held in Colombo from August 28 -31, this year.

In an effort to reduce the amount of vegetation imports, the Ministry of Agriculture and Agrarian Services has allocated Rs. 17.5 million for a large-scale vegetable cultivation project. The project should reduce Sri Lanka's dependence on other countries for agricultural imports and improve the income of farmers. Beans, dambala, green grams, and tomatoes will all be grown in the project.

In Sri Lanka during the first five months of this year, total revenue from corporate profits tax, personal income tax, and tax on interest income stood at Rs.49,270 million, a 25% increase compared to the same period last year. Furthermore, revenue from the Economic Service Charge also increased. In 2007, income taxes reached 3% of the GDP.

During the first four months of 2008, exports grew by 12%. Agriculture and tea exports increased by 37% and 11% respectively. On the other hand, imports increased by 37%, reflecting price hikes this past year for petroleum and other international goods.

In accordance with the Sri Lanka’s Department of Census and Statistics, 15 percent of the population lives under the poverty line. The 19 poorest Grama Sewa Wasams (Village Officer Divisions) are also included in the report which was handed over to Prime Minister Rathnasiri.

The Securities and Exchange Commission has warned brokers against manipulation in the stock prices by using the pre-open mechanism of the automated trading system. The technique consisted on entering a buy order at very much higher price than the previous close and a sell order for a very low price.

Fitch Ratings has decreased Sri Lanka’s sovereign rating to a B+. The reason for this was weak budgets, high inflation, and too much borrowing from foreign lenders at commercial rates. It was said that Sri Lanka was too concerned with war and not with the economy.

World Bank approved a credit of USD 65.33 million for Sri Lanka to enhance the operational efficiency of 80 old dams, and to implement arrangements for safety management and maintenance. Ms. Naoko, the World Bank Country Director for Sri Lanka, stressed the need to implement water resource planning and development investments.

Sri Lanka’s Central Bank supply of money has declined. Credit to the private sector has dropped by 18.3 percent while credit to the government has fallen by 10.5 billion rupees in a month. The central bank is particularly worried with the constant expenditure of credit by public oil corporations, given that oil prices are rising overseas.

Last year Sri Lankan industry export earnings exceeded 1 billion dollars, as a result of privatization of Sri Lankan tea estates and branding, as well as the Colombo tea auctions, storage and brokerage services. Since privatization in 1992, tea plantations have become key contributors in the economy of Sri Lanka. The tea industry by itself sustains a population over one million.