Sri Lanka tourism fighting back from Easter bombings: minister

Colombo

SRI Lanka's tourism industry is recovering faster than expected after the Easter Sunday suicide bombings shook the island-nation, giving a much-needed boost to the economy, Finance Minister Mangala Samaraweera told AFP.

The country was hit by mass cancellations after Islamic State-backed terrorists attacked three churches and three hotels on April 21, leaving 258 dead, including dozens of foreigners.

Yet, even in the bombings' aftermath, domestic tourists filled hotels, and visitors from key European markets are already starting to return, Mr Samaraweera said in the interview on Wednesday.

He had initially predicted that Sri Lanka could lose 30 per cent of its tourism revenues - about US$1.5 billion this year - but now believes the loss will be less than US$1 billion.

"We are beginning to feel that the situation was not as dire as we expected," Mr Samaraweera said. "Bookings are coming back." Hotels were able to keep staff by offering "excellent packages" to Sri Lankan tourists, he added.

The government also set aside hundreds of millions of dollars to provide cheap credit for tourism businesses hit by the crisis.

Bus companies, bed and breakfast owners and the makers of Buddhist festival decorations all received interest-free loans, the minister said.

"Even the musicians who accompany the processions claimed they were out of pocket," he said.

After five years in which Sri Lanka has faced a series of blows, Mr Samaraweera said the economy could get to 5 per cent annual growth from next year if calm was restored.

"The last five years have not been easy for Sri Lanka," he said, referring to floods and then a drought, which were followed by a political crisis in 2018 and the 2019 attacks.

The economy slowed to 3.2 per cent last year, down from 3.4 per cent in 2017, because of a power struggle between the country's president and prime minister.

Mr Samaraweera told parliament earlier this year that the political battle had cost the economy US$1 billion in capital flight from debt and equity markets.

The International Monetary Fund has since revived a bailout programme with Sri Lanka, and the government resumed international sovereign bond sales in March.

"I hope that for this year, we can come back to 3.8 to 4 per cent growth, and in the next two years if it's 5 per cent, we would be happy." Sri Lanka raised US$2 billion this week in its first international bond auction since the bombings.

The minister said the interest rates were lower than for a US$2.4 billion auction in March - before the attacks - and this showed confidence in the country's ability to bounce back.

"The international community has shown that they still have confidence in the good macroeconomic foundation we laid." AFP