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The All-Island Egg Producers’ Association has dismissed claims that egg prices will increase during the festive season, calling them completely false.

Chairman Sarath Ratnayake stated that certain groups are spreading these misleading statements in an attempt to justify the importation of eggs.

He added that eggs can still be supplied for less than Rs. 45, reaffirming the Association’s position.

The Mahaweli Development Authority (MDA) has announced that heavy vehicles will no longer be permitted to use the roadway over the Kotmale Dam, citing safety and structural considerations.Nuwara Eliya District MP Manjula Suraweera Arachchi revealed that the MDA is also preparing to provide 55 hectares of land under its jurisdiction for resettlement purposes, particularly for communities affected by ongoing weather-related risks.

Addressing recent speculation, MDA Director General H.M.J. Herath firmly rejected social media rumors claiming the dam’s sluice gates had been opened without necessity. He stressed that engineers make such decisions strictly based on scientific data and hydrological analysis.

Herath made these remarks following an inspection of the dam’s sluice system and subsequent discussions held at the MDA office in Kotmale. He further noted that a new public alert mechanism will soon replace the current method used to inform residents ahead of future sluice gate operations.

The government’s “Rebuilding Sri Lanka” programme, launched to support recovery efforts following the devastation caused by Cyclone Ditwah, has secured Rs. 1,893 million in contributions from local donors, Sri Lankans living abroad, and several institutions, according to Dr. Harshana Suriyapperuma, Secretary to the Ministry of Finance, Planning and Economic Development.Dr. Suriyapperuma noted that a special meeting - convened by the Insurance Regulatory Commission of Sri Lanka and attended by the heads of all major insurance firms-was held to develop a unified compensation mechanism for cyclone-related losses.

During this discussion, insurers confirmed that they have already rolled out a fast-track compensation process for affected individuals and businesses. Payments for minor property damage have begun, ensuring quick financial relief to those impacted.

For major property losses, compensation will be finalized after necessary assessments are completed. However, representatives from insurance companies assured that partial payouts will be released immediately, even before full evaluations conclude, to help families and businesses begin recovery without delay.

Sri Lanka’s effort to broaden its tax base has run into fresh obstacles as Inland Revenue Department (IRD) officials attempt to meet sharply increased revenue targets amid severe disruptions from the recent cyclone and flooding. Inland Revenue Department (IRD)

A senior-level discussion chaired by Deputy Minister Nishantha Jayaweera has now accelerated pressure on the IRD to simplify taxation processes and deliver a workable plan to achieve this year’s revenue targets.

The meeting included IRD Commissioner General Rukdevi Fernando and senior Finance Ministry officials, who examined the urgency of widening the tax net in light of reduced indirect-tax inflowsparticularly the steep drop in revenue from vehicle import duties.

Vehicle imports, traditionally a cornerstone of government revenue, have declined dramatically due to tightening foreign-exchange controls and policy uncertainty, leaving a widening gap in the tax portfolio.

According to the Ministry statement, the Deputy Minister directed the IRD to minimise taxpayer inconvenience, streamline the return-filing process, and strengthen awareness campaigns. Officials also discussed increasing voluntary compliance, which remains low due to bureaucratic complexity, distrust in the system, and limited digital uptake among small businesses.

However, the external environment is working against these ambitions. Cyclone-related flooding has severely affected businesses across multiple districts, damaging tax records, disrupting supply chains, and delaying the reopening of enterprises that contribute significantly to VAT and income-tax flows. In some regions, IRD field officers have flagged that taxpayers are unable to meet filing deadlines due to destroyed equipment and damaged premises.

The government’s revised revenue target for 2025—raised from Rs. 4,590 billion to Rs. 4,725 billion was set in expectation of stronger performance in income tax and goods-and-services levies.

The upward revision includes a 3.7% increase in the income-tax target to Rs. 1,210 billion and a 6.5% increase in levies on goods and services to Rs. 2,953 billion. Yet field data suggests that disaster-affected regions may not contribute at full capacity for months.

The IRD has long struggled to expand the tax base, with fewer than 10% of the workforce paying income tax and significant under-reporting among small and medium-sized enterprises. Officials say the cyclone has further pushed informal-sector workers into financial distress, reducing the likelihood of new registrations this year.

Analysts caution that expanding the tax net during a disaster recovery phase requires careful sequencing. Heavy-handed enforcement risks driving informal businesses deeper underground. Instead, tax officers recommend phased filing, targeted incentives, and digital-onboarding support to gradually integrate new taxpayers without harming economic recovery.

Despite these challenges, the IRD is expected to present its updated revenue-mobilisation plan within weeks. But insiders warn that meeting the newly revised targets already ambitious under normal conditions will depend heavily on reinstating trade flows, particularly vehicle imports, and ensuring disaster-hit businesses return to operation swiftly.

Sri Lanka has recorded 50,222 tourist arrivals in the first eight days of December, according to the latest data released by the Sri Lanka Tourism Development Authority (SLTDA).

India continues to lead as the largest source of visitors, with 10,453 arrivals, making up 21% of the total. Russia followed with 5,420 visitors, while 4,822 tourists arrived from Germany. The United Kingdom contributed 3,823 travelers, and 2,627 French nationals visited during the same period.

With the addition of the early December arrivals, Sri Lanka’s total tourist count for 2025 has risen to 2,153,815. Of the overall arrivals, 485,249 are from India, while 195,565 visitors have come from the UK. Russia has contributed 164,013 tourists, Germany 136,081, China 124,298, and France 103,307, the SLTDA reported.

Sri Lanka’s external debt position continues to tighten, raising questions about the country’s ability to navigate its recovery phase while meeting rising repayment obligations.

 The Public Debt Management Office’s latest Quarterly Debt Bulletin shows that as of end-September 2025, Sri Lanka’s external debt stock reached USD 37.24 billion, marking a USD 100 million increase from the previous quarter.

Despite being locked out of global capital markets since the 2022 default, the government continues relying on multilateral financing from institutions such as the World Bank and Asian Development Bank both of which now account for more than 83% of multilateral exposures.

According to the bulletin, multilateral lenders represent 37% of the external portfolio, commercial creditors 34%, and bilateral partners 29%.

Sri Lanka managed to settle USD 1.36 billion in external obligations during the first half of 2025, completing 55% of the year’s total requirement. This leaves USD 1.09 billion in payments due before year-end.

Central Bank Governor Dr. Nandalal Weerasinghe has repeatedly cautioned that annual commitments will average USD 2.75 billion through 2027, before rising significantly from 2028 when pre-crisis obligations and new financing lines converge.

 According to him, repayments after 2028 are projected to range between USD 3.2–3.5 billion, with some years expected to touch USD 4 billion.

This looming repayment spike underscores the urgency of Sri Lanka’s restructuring efforts. Substantial progress has been recorded since the 2022 default.

 In June 2024, the government secured treatment agreements with the Official Creditor Committee and separately with the Export-Import Bank of China, followed by amendment arrangements to operationalise both deals. The restructuring of loans from China Development Bank was also completed in December 2024.

On the commercial front, an agreement in principle with International Sovereign Bondholders (ISBs) was reached in September 2024, with the bond exchange executed in December. Participation reached an impressive 98%, enabling nearly the entire defaulted commercial portfolio to be converted into new instruments.

Bilateral negotiations have also advanced steadily through 2025, with agreements finalised with Japan, India, France, Hungary, and the United Kingdom, bringing total restructuring completion to about 94%. More recently, SriLankan Airlines reached an agreement in principle with bondholders holding USD 175 million.

With these arrangements in place, the government has resumed regular servicing to creditors. But the underlying issue remains unchanged: while restructuring has bought Sri Lanka breathing space through 2027, the impending jump in repayment obligations from 2028 onward raises concerns about the country’s long-term debt sustainability.

 Without stronger export growth, fiscal reforms, and renewed market access, experts warn that Sri Lanka risks drifting back toward repayment stress within the next decade.

The UNDP has raised the alarm over Sri Lanka’s worsening post-cyclone recovery, warning that the country is confronting a dual crisis of massive disaster damage and severe debt vulnerability.

The agency has urged development partners to extend concessional financing and non-debt instruments, arguing that Sri Lanka lacks the fiscal space to rebuild responsibly after Cyclone Ditwah, which inundated 20% of the country and triggered 1,200 landslides.

UNDP Resident Representative Azusa Kubota said the disaster hit at a moment when Sri Lanka’s economy was only beginning to stabilise. “After one of its worst economic crises, Sri Lanka cannot absorb more debt to fund recovery,” she said, stressing that donor support is essential to prevent the country from “falling off the debt cliff.”

UNDP’s geospatial mapping shows a massive scale of exposure: 2.3 million people, including 522,000 children and 263,000 older persons, were affected by floods and landslides.

Divisional Secretariats in Puttalam, Kilinochchi, Mullaitivu, Nuwara Eliya, Badulla, and Kegalle reflect the most severe combined impacts, where fragile governance systems and pre-existing poverty amplify recovery challenges.

The disaster’s infrastructure toll is enormous. Nearly 720,000 buildings from hospitals to schools were exposed to water. Colombo, Gampaha, and Polonnaruwa districts recorded some of the highest totals, with Ja-Ela alone reporting more than 44,000 exposed structures.

The transport network has been heavily disrupted, with 16,000 km of roads, 480 bridges, and 278 km of railway affected, cutting communities off from critical services.

Debris removal has emerged as one of the biggest barriers to recovery. More than 240,000 tons of non-construction waste and 60,000 cubic metres of construction debris have been recorded, with Colombo facing the largest volumes. Costs continue to rise as verification progresses.

Agricultural exposure is equally damaging. Over 530,000 hectares of paddy land were flooded—endangering national food security. In several districts, 20–30% of households lack even a week’s worth of dry food, signalling the depth of the humanitarian strain.

UNDP’s early recovery plan calls for urgent action: restoring essential services, supporting MSMEs, rebuilding community infrastructure, and replacing vital documentation lost in the disaster. The agency also emphasised strengthening local authorities who must manage relief registries and community outreach.

UNDP Crisis Bureau official Devanand Ramiah stated that the cyclone demonstrated how multiple risks can converge rapidly, making global support indispensable.

With Sri Lanka still negotiating debt sustainability in the aftermath of its economic collapse, UNDP’s appeal underscores a grim reality: without external concessional support, rebuilding will push the nation deeper into the debt trap it is struggling to escape.

The National Audit Office’s (NAO) audit plan for 2026 has drawn attention not only for its volume 3,508 audits, the highest in recent years but for its implications on the broader economy, public-sector efficiency, and the future of good governance in Sri Lanka.

The breakdown of next year’s workload 3,484 financial audits, 12 special audits, 11 performance audits, and one environmental audit signals an expanded mandate aimed at tightening accountability within state institutions. But, it also exposes a capacity strain that may undermine the effectiveness of audit oversight unless addressed urgently.

A central concern emerged during recent deliberations of the Committee on Public Finance (COPF): whether the NAO is adequately staffed to handle this surge. The assignment of auditing Samurdhi Community-Based Banks and Samurdhi Bank Societies from 2026 adds significant weight. This welfare-linked financial network affects millions of low-income families, making rigorous auditing essential to prevent leakages, fraud, and political interference.

Officials from the Audit Office admitted the need for an additional 10–15 percent workforce, noting that pilot audits are currently being carried out through regional offices to determine actual staffing needs. COPF agreed that outsourcing may be necessary, but insisted that the Auditor General must first present concrete findings by February 2026.

 Beyond administrative challenges, experts warn that the audit findings of 2026 will have direct economic consequences. Sri Lanka’s fiscal recovery hinges on improving state-sector efficiency, meeting IMF commitments, and restoring credibility in public spending. Any weaknesses uncovered in welfare schemes, state-owned enterprises, or regulatory agencies could influence budget allocations, debt management strategies, and investor confidence.

Discussions at COPF also extended to regulations under the National Medicines Regulatory Authority Act, reiterating the need for transparency in the pharmaceutical sector an area where delays, opaque licensing systems, and pricing concerns have historically affected public health budgets. Strengthened audits could help identify systemic inefficiencies and policy gaps.

The committee also reviewed the Final Report on the 2026 Appropriation Bill, which outlines spending priorities for next year. NAO’s audits will play a central role in determining whether ministries comply with budgetary discipline and whether public funds deliver expected outcomes.

Good governance advocates argue that the NAO’s expanding workload reflects Parliament’s renewed interest in oversight, but caution that an audit is only as effective as its follow-up. Without timely corrective action by ministries, audit recommendations often remain unimplemented, weakening accountability.

As Sri Lanka moves into a year of intensified scrutiny, the effectiveness of the National Audit Office will influence not only public-sector governance but also the country’s economic stability. The coming year will test whether audit capacity can keep pace with the country’s growing oversight needs.

Prime Minister Dr. Harini Amarasuriya has declared that unauthorized constructions in the Colombo District will not receive approval under any circumstance, warning that such unplanned development has intensified the district’s vulnerability to flooding. She stressed that no project -particularly those disguised as development initiatives -will be permitted if it poses a threat to public safety.

Speaking to the media after the Colombo District Disaster Management Committee meeting held on December 9 at the Colombo District Secretariat, the Prime Minister highlighted that years of ad-hoc construction, regulatory neglect, and politically driven decisions have placed both the district and its residents in a dangerous position.

While recent cyclone-related destruction was far more severe in other districts, she noted that Colombo still faces significant future risks. To address this, relevant state agencies are now working together on targeted interventions to reduce the district’s susceptibility to flooding.

Dr. Amarasuriya emphasized that recurring floods cannot be allowed to become a routine hardship for the people of Colombo. A coordinated district-wide plan for flood prevention is being developed, with implementation measures expected to begin soon.

She further confirmed that discussions are underway to introduce lasting and sustainable solutions for families currently living in high-risk zones across the district.

The meeting was attended by Deputy Minister of Urban Development Eranga Gunasekara, Deputy Minister of Mass Media Kaushalya Ariyaratne, and Colombo District Members of Parliament Aruna Panagoda and Chandana Suriyarachchi.

Moody’s Investors Service has issued a stark warning that Sri Lanka now faces the most severe credit consequences from the wave of climate-related disasters that have struck South and Southeast Asia in recent weeks.

In its 5 December statement, the rating agency highlighted that the region has endured a series of tropical cyclones combined with unusually intense monsoon rains since mid-November, leading to widespread flooding, landslides and substantial loss of life.

According to Moody’s, while several countries across the region share exposure to physical climate risks, Sri Lanka stands out due to its significantly weaker fiscal buffers.

The agency groups Sri Lanka, Indonesia, the Philippines and Vietnam among the countries with high sensitivity to climate-related shocks, but stresses that Sri Lanka’s constrained public finances give it far less room to absorb economic losses or invest in adaptation.

This amplifies the credit impact at a time when the country is still attempting to stabilise after its historic sovereign default.

Moody’s also linked the scale of climate risk exposure to the strength of public institutions. Although recent reforms have somewhat improved Sri Lanka’s policy framework, it still carries a governance issuer profile score of 4 the same as Vietnam indicating substantial vulnerability to governance-related credit pressures.

In contrast, peers with stronger governance and fiscal capacity are expected to face more limited credit fallout from the same disasters.

 The agency also noted that the severity of flooding across the region exposes deeper structural weaknesses, including the widespread absence of natural catastrophe insurance. As climate-related events grow more frequent and more destructive, the credit implications for governments are expected to intensify unless resilience investment increases.

Last October, Moody’s assessed that Sri Lanka’s macroeconomic stabilisation was progressing broadly as expected, with the current account projected to remain in surplus through 2025 due to tourism and remittances.

However, the country’s narrow tax base, dependence on external financing, and extremely low debt affordability remained major risks, particularly if global financial conditions tightened.

Moody’s said that maintaining reform momentum under the IMF-supported programme is essential for improving the island’s credit profile. Any rollback of reforms or weakening of external buffers, it warned, could quickly reverse recent gains.

Following Cyclone Ditwah, Sri Lanka has requested around US$200 million under the IMF’s Rapid Financing Instrument to help address emergency fiscal needs.

The Fifth Review of the IMF’s Extended Fund Facility originally scheduled to conclude on 15 December and unlock a US$347 million disbursement has now been deferred to early 2026 due to the new fiscal pressures created by the disaster.