Sri Lanka’s Parliamant approves budget amid economic crisis

COLOMBO, Sri Lanka (AP) — Sri Lanka’s Parliament approved a budget on Thursday that includes reforms aimed at improving the country’s finances as it attempts to recover from its worst economic crisis.

The 5.82 trillion rupee ($15 billion) budget includes a 43 billion rupee ($117 million) relief package for those affected by the crisis.

The budget provides for a restructuring of state-owned enterprises, reduced subsidies for electricity, and tax increases to boost state revenue based on proposals by the International Monetary Fund under a preliminary $2.9 billion bailout plan.

Unsustainable government debt, a severe balance of payments crisis and the impact of the COVID-19 pandemic led to a severe shortage of essentials such as fuel, medicine and food, and soaring prices have caused severe hardships for most Sri Lankans. Many have lost their jobs because businesses have become unsustainable.

The government announced last April that it is suspending repayment of nearly $7 billion in foreign debt due this year. It has since entered a preliminary agreement with the IMF, which has agreed to provide $2.9 billion over four years depending on the willingness of Sri Lanka’s creditors to restructure their loans.

Sri Lanka’s total foreign debt exceeds $51 billion, of which $28 billion has to be repaid by 2027.

The economic meltdown triggered a political crisis in which thousands of protesters stormed the official residence of the president in July, forcing then-President Gotabaya Rajapaksa to flee the country and later resign.

President Ranil Wickremesinghe, who succeeded Rajapaksa, has somewhat reduced the severe shortages of fuel and cooking gas, but power outages continue, along with severe shortages of imported medicines.

The agriculture sector is an evergreen sector of the economy. The world will always need food, and the companies in this sector help ensure the world is fed. In fact, agriculture stocks are typically considered to be in the same category as consumer staples because demand remains constant no matter what is happening in the broader economy.

This is also a diverse sector. And that can get confusing for investors. Investors can buy into pure-play companies that make fertilizer and pesticides. You can choose to look at companies such as Deere & Company (NYSE:DE) that supply the equipment that many farms use.

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This presentation highlights seven agricultural stocks that offer investors different ways to play the sector.

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