Chayu Damsinghe Profile picture
Macroeconomics with @FrontierResSL and Special Needs Care with @DaddysLanka Opinions my own, do not reflect any employer/3rd party, RT/likes≠endorsements
Amila Withanage Profile picture 2 added to My Authors
Jul 24 26 tweets 7 min read
With the new government finally expected to bring in an interim budget in August (fingers crossed), lets look at government expenditure, how high it really is, and what we can do about it.

#SriLanka #EconomicCrisisLK

(1/25) Despite some belief that Sri Lanka has high expenditure levels, and we need to "cut down" on this - this is actually not the case.

Looking at the data shows that Sri Lanka actually has quite low government expenditure by global and regional standards.

Jul 12 10 tweets 1 min read
Time for a series of polls, at least of my Twitter audience. Remember, Twitter polls are anonymous.

Do try to answer the lot, promise it'll be interesting!

(also please don't read too much into the wording of the answers!)

Question 1: Do you want GR out from the presidency? Question 2: Do you want RW out from the premiership/presidency?
Jul 9 20 tweets 4 min read
For good intentions and bad, a question coming up now is "What happens if #GoHomeGota succeeds?"

A lot of false info and lies floating around about this, so let me try and clarify to best of my ability

#අරගලයටජය #EconomicCrisisLK #GoHomeRanil for reach

(1/20) Disclaimer first, especially since political content. Politics is not my expertise, so take THAT aspect with a grain of salt. Will do my best to keep this analysis economic. But still personal opinion

Jul 9 6 tweets 1 min read
A small thing on Steven Hanke and his push for a currency board.

He works for the Cato Institute, a free-market think tank pushing for right-wing policy. That's fine, people can have views. But important to be AWARE of this bias.

Here are a few extracts from Hanke: "A Dollarization Mission for Secretary Pompeo"

"If Secretary Pompeo wants to make life even more difficult for Beijing’s renminbi promoters, he should grab the mantle and start promoting the use of the U.S. dollar. "
Jun 27 19 tweets 5 min read
Why is there no fuel in Sri Lanka?

Main reason - no USD to pay for it.

Then why is there no USD?

Let me try and explain, and thereby give some hope on how we can get out of this sooner than later.


#EconomicCrisisLK #FuelCrisisLK #GoHomeGota2022 Sri Lanka has had 2 main sources of USD.

1 - export/remittance/tourism earnings (ie trade)
2 - investment/grant/debt inflows (ie fund flows)

Our main source of outflows have been 3 - imports and 4 - debt repayments.

So increase 1 and 2, reduce 3 and 4. Simple, right?

May 19 25 tweets 9 min read
Coming back after a few days off Twitter, thought I'd try and explain in a (hopefully) easy + visual way why, despite things being really tough right now, there's space for hope - even if it doesn't feel like it
#SriLankaEconomicCrisis #EconomicCrisisLK #SriLanka #aragalaya Disclaimer - personal opinion of course, and this framework is a complete oversimplification, but hopefully this can serve as a useful introduction into why there's space for hope
May 13 16 tweets 4 min read
A lot of conversation on RW as PM and what it means politically, but a quick thread on what I think a GR-Prez/RW-PM led (mostly) SLPP government means economically

#EconomicCrisisLK #SriLankaEconomicCrisis #SriLankaCrisis #SriLanka #lka Disclaimer - I'm no political expert, so my views on POLITICS are no more important than any other random citizen. What I'll try to explain is my personal view on the economics on which I hopefully have more credibility
Apr 26 7 tweets 2 min read
There's an absolutely critical piece of economic information that I feel too many people are missing.

Our reserves cover is likely less than 3 days of imports.


(1/7) This comes from our foreign currency reserves being around 1.72 bn USD, and of that around 1.57 bn USD being in an unusable RMB swap facility.

Leaving our usable currency reserves around 150 mn USD

Apr 26 5 tweets 1 min read
Here's a secret about economics that surprisingly few (including, even more surprisingly, those researching the field) seem to know.

There's no "correct" economics - it's all context specific

(1/5) Context specific across countries (what works in China doesn't work in SL and vice versa) but also time.

Eg- Labour exploitation for growth was widely practiced and accepted in industrial Europe, we (rightly) reject that on ethical grounds now

Apr 22 23 tweets 4 min read
ණය සහ ආර්ථික අර්බුධය, IMF උදවු, මේ ටිකෙන් ලංකාවේ ආර්ථිකයටයි රටේ මිනිස්සුන්ටයි ඉස්සරහට මොකද වෙන්න යන්නේ? 👇

#SriLanka #SriLankaEconomicCrisis (#GoHomeGota2022 #අරගලයටජය for reach) ලංකාව මෙතෙන්ට එන්න කලින්, අවුරුදු ගාණක් තිස්සෙ ආර්ථික ගැටලු වලට මුහුණ දීපු රටක්. මන් කලින් කතා කරා අපේ ආණ්ඩුවේ ආදායම්/වියදම් හිඟය ගැනත්, රටේ ඩොලර් ආදායම්/වියදම් හිඟය ගැනත්.

Apr 22 25 tweets 4 min read
2019 අලුත් ආණ්ඩුව ආපු දවස ඉඳන් ගත්ත ආර්ථික තීරණ වලින් ආර්ථිකය ලොකු අමාරුවකට වැටුණ එක අපිට හොඳට තේරෙනවා.

හැබැයි ඇත්තටම මොකද්ද වුණේ - කොහොමද මෙච්චර ඇණ ගත්තෙ? 👇

#SriLanka #SriLankaEconomicCrisis (#GoHomeGota2022 #අරගලයටජය for reach) 2019 වෙනකොට, ආර්ථිකය එච්චර හොඳ තැනක නෙමෙයි තිබුණේ. 2017/18 වල ආණ්ඩුවේ ආදායම්/වියදම් හිඟය පාළනය වුණත්, ණය බර තාම තිබුණා. ඉස්සරහ අවුරුදු වල ගොඩක් ණය ගෙවන්න තියෙන බව පෙනුනා.

Apr 22 21 tweets 4 min read
අපේ රටේ ආර්ථිකය මෙච්චර වැටුණේ කොහොමද?

කලින් කතාවේ ඉතුරු ටික 👇

#SriLanka #SriLankaEconomicCrisis (#GoHomeGota2022 #අරගලයටජය for reach) 2016 වෙනකොට අපේ ආර්ථික ප්‍රශ්න නිසා තවත් අර්බුදයක් අපි මුහුණ දුන්නා. 2015 පාර්ලිමේන්තු ඡන්දය වෙනුවෙන් දුන්න සහන නිසා, ආණ්ඩුවේ වියදම් වැඩි වෙලා, අර්බුදය ඉක්මන් වුණා.

Apr 22 9 tweets 3 min read
ලංකාව කොහොමද මෙච්චර වැටුණේ? මං සිංහලෙන් විස්තර කරලා නැති නිසා, මෙතෙන්ට ආවේ කොහොමද කියලා මුලින් පටන් ගමු 👇

#SriLanka #SriLankaEconomicCrisis (#GoHomeGota2022 #අරගලයටජය for reach) 2016 විතර වෙනකොට, අපේ රටේ ණය බර, ආර්ථිකයේ ප්‍රමාණය එක්ක බලනකොට වැඩි වේගෙන එනවා. මේ වැඩි වීමට ප්‍රධාන හේතු තුනක් තිබුණා.

1 - කලින් ගත්ත ණය ගෙවන්න අලුත් ණය ගන්න එක
2 - ආණ්ඩුවේ ආදායම්/වියදම් අතර හිඟය පුරවන්න
3 - රටේ ඩොලර් ආදායම්/වියදම් අතර හිඟය පුරවන්න

Apr 19 21 tweets 5 min read
What's happening in Rambukkana, and anything else that follows, is catastrophic. We can't forget the criminal economic policies that led to this or allow those who advocated for those to be the good guys.

#ProtestLK #SriLanka

(1/21) Even in 2018, Sri Lanka was facing a long term debt issue. It was tough, it was going to be damn difficult to get through. Realistically, the only option we had to pay our debt and keep our reserves, was more debt.

So we started that.

Apr 18 9 tweets 3 min read
A quick thread on how government expenditure is almost always paid for the people - in 1 of 3 ways

#SriLankaEconomicCrisis #SriLanka #lka (#GotaGoGama #GoHomeRajapakshas #GotaGoHome2022 #අරගලයටජය for reach)

(1/9) Whenever a government has an expense, it's paid in 1 of 3 ways.

1. Taxes
2. Loans
3. Money printing

Despite what it looks like, taxes are often the least anti-poor

Apr 17 30 tweets 8 min read
Following import substitution, self-sufficiency, and local production didn't work out for Sri Lanka in the last 2 years. My longest 🧵yet to explain - promise it's worth it!


#SriLankaCrisis #SriLanka #lka (#GotaGoGama #GoHomeGota #GoHomeRajapakshas #අරගලයටජය for reach) Now, these ideas are often "common sense". It sounds good - if we have a forex problem, lets stop importing and make it ourself! Lets be self-sufficent, why depend on others?

But econ ISN'T common sense - so let's go through my view on why these don't work.

Apr 16 24 tweets 6 min read
I promise I'll try my best to make this not-boring, but let's talk taxes in Sri Lanka.

#SriLanka #SriLankaEconomicCrisis #lka (also #GotaGoGama #OccupyGalleFace #අරගලයටජය #GotaGoHome2022 for reach)

(1/24) Our tax revenue before 2019 was about 11-12% of GDP. After the tax cuts, this came down to around 8%. Both in comparison to around 12-14% in non-debt expenditure (about 16% in 2019 due to election goodies)

Explained how this was a problem here

Apr 15 23 tweets 5 min read
Let me try and explain the Uganda banknote mess as much as I can and how it relates to Sri Lanka and how it doesn't.

#SriLanka #SriLankaEconomicCrisis #lka (also tagging #GotaGoGama #OccupyGalleFace for the reach)

(1/22) As I understand it, there are 2 separate issues here, which may be linked together in a way we don't yet know.

1. Uganda's own money laundering issues
2. De La Rue printing Ugandan money and SLA airlifting it

Apr 15 20 tweets 6 min read
I'm going to do a single political thread on the #GotaGoGama #GoHomeGota #OccupyGalleFace protest and a threat it faces. Might be contentious, but please give alternative views.

#SriLankaCrisis #SriLankaEconomicCrisis #SriLanka

(1/20) Starting off with a few disclaimers.

I think the protests are great for Sri Lanka, I think they've done permanent good already, I think they should continue.

I'm also not a political/social expert - so take this from that POV.

Apr 13 11 tweets 4 min read
What will happen to Sri Lanka, economically, over the next few months, especially to its people?

The answer isn't pretty, but it's something to prepare for.

#SriLankaProtests #SriLanka (Also tagging #GotaGoGama #GoHomeGota #OccupyGalleFace #අරගලයටජය for reach)

(1/11) Let's assume there's some sort of political stability at some point. What that is doesn't really matter too much to this thread's outcomes, it just extends the timeline if it's delayed.

With that out of the way - what will SL need to come out of this?

Apr 13 21 tweets 4 min read
Going to explain depreciation, how the official market failed and the unofficial market took it up, and what's needed for the two to come together.

#SriLankaEconomicCrisis #SriLankaCrisis #SriLankaProtests

(1/20) Exchange rate is basically the value of a currency in terms of other currencies. Eg- 1 USD is worth XX LKR and vice versa.

Depreciation is when 1 currency loses value against another. Eg- 1 USD going from 200 LKR to 300LKR

Appreciation is opposite.