The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development
The Minister clarified that the stock market reference should be to the Price-to-Earnings ratio, noting that Sri Lanka’s P/E of about 9.28 implies an earnings yield broadly aligned with domestic interest rates and should not be compared internationally without accounting for interest rate differences. He also stated that liquor taxation adjustments are not hidden measures, but part of inflation- and rate-linked revisions affecting categories such as alcohol and electronics to support fiscal consolidation during economic recovery.
Verbatim record (translated)
Machine-translated from Sinhala / Tamil / English¶ 01 Mr. Chairman, two clarifications. First, on investments and the stock market: what was cited as “price of earnings” should be the Price-to-Earnings (P/E) ratio, a relative valuation metric. Sri Lanka’s P/E of about 9.28 implies an earnings yield around 11%, which is broadly consistent with domestic interest rates. Comparing P/Es across countries without adjusting for differences in interest rates is misleading.
¶ 02 Second, on liquor taxation: this is not a hidden process. When stabilizing the economy, certain categories—including alcohol and electronics—require adjustments aligned with inflation (approx. 1.9%) and the selected rate (around 4%). These measures support fiscal consolidation in a recovering economy.
Provenance
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- Hansard, Friday, 21 March 2025 ·No. 1747297753031842 ·English daily/uncorrected Hansard
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Cite as: The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development. 10th Parliament, Parliament of Sri Lanka. Hansard, 21 March 2025. No. 1747297753031842. Politick, https://staging.politick.io/lk/speeches/15738