Economic

The Advocata Institute's comprehensive policy proposals for the 2026 Budget outline a critical reform agenda aimed at enhancing fiscal sustainability, fostering competition, and driving inclusive economic growth.

These proposals address systemic issues across key sectors, advocating for modernization and performance-based governance:

1. Tax Reform in the Port City: Advocata recommends replacing the existing generous Corporate Income Tax (CIT) and Personal Income Tax (PIT) exemptions offered to Port City Business Entities and employees with Tax Credits. This shift utilizes tax credits as a targeted, performance-based tool, tying incentives directly to measurable outcomes such as verifiable job creation and capital commitment, thereby attracting investment while protecting essential public revenue.

2. Accelerating Land Titling (Bim Saviya): The report calls for the acceleration and reform of the Bim Saviya program, which has stagnated for 25 years. Accelerating this process—which converts the deed-based system into a state-guaranteed title system—is essential to unlock billions in “dead capital” and strengthen governance. Clear titles are crucial, as secure property rights underpin investment and could increase access to finance by 25–30 percent in comparable economies.

3. Phasing Out Para-Tariffs: To dismantle protectionist barriers and enhance competition in tradable sectors, Advocata urges the government to accelerate the phased elimination of para-tariffs, specifically the Cess and the Port and Airport Levy (PAL). This reform is crucial for promoting efficiency, reducing trade costs, and re-establishing the economy's connection to global markets.

4. Modernizing Social Security: A three-pillar reform strategy is proposed to transform Sri Lanka's outdated and fiscally unsustainable social protection system. Key steps include: transforming the EPF into a competitive, multi-fund superannuation model; introducing a contributory pension scheme for public sector employees; and establishing a joint contributory Unemployment Insurance Fund to provide a safety net for workers.

5. Enacting Plant Variety Protection: To address the stagnation in agricultural productivity, the Institute recommends drafting and enacting a Plant Variety Protection Act (breeder rights legislation). This intellectual property protection would incentivize the private sector to recover research costs and develop urgently needed productive and climate-resilient seed varieties.

Read full report here

Charith N. Silva, the creator behind the popular YouTube channel Wild Cookbook, has become the first Sri Lankan content creator to surpass 10 million subscribers on the platform.

Since launching his channel in 2020, Charith has uploaded over 600 videos, amassing more than 4 billion views. His unique outdoor cooking style and authentic Sri Lankan recipes have drawn a global audience, setting a new benchmark in the local digital content space.

This milestone marks a significant achievement in Sri Lanka’s YouTube history.

Sri Lanka plans to mobilise nearly US$11.26 billion through Sovereign Green, Blue, and Sustainability-Linked Bonds by 2030, under the newly launched National Climate Finance Strategy (NCFS) 2025–2030, aimed at funding renewable energy, biodiversity conservation, and climate adaptation projects aligned with its 2050 carbon neutrality goal.

Developed with support from the UK Government and UNDP, the NCFS lays out a roadmap to make Sri Lanka a regional hub for sustainable finance. The Finance Ministry has already prepared a Sovereign Green and Blue Bond Framework and enlisted an international rating agency to ensure compliance with global green bond standards through a second-party review.

The strategy’s financial instruments Green Bonds, Blue Bonds, and Sustainability-Linked Bonds—each target specific sustainability outcomes. Green Bonds finance renewable energy, waste management, and afforestation. Blue Bonds focus on ocean conservation and sustainable fisheries. Sustainability-Linked Bonds, meanwhile, tie borrowing costs to measurable environmental performance, incentivising policy consistency and transparency.

Advantages of these instruments include access to lower-cost capital, improved sovereign credit reputation, and attraction of foreign climate-focused investors. They also signal policy continuity and accountability, which are crucial for investor confidence. The oversubscription of recent Green Bond issues indicates growing domestic investor interest, including from the private sector and retail participants.

However, there are risks and challenges. Experts note that managing transparency, reporting standards, and credible project pipelines is vital to avoid “greenwashing.” Ensuring funds are used exclusively for verified environmental outcomes will require robust monitoring and third-party audits. The country must also strengthen its institutional capacity to manage complex bond issuances and meet investor expectations in a volatile economic environment.

The NCFS’s phased implementation plan includes creating a sustainable bond framework, enhancing capacity building, developing climate-friendly projects, and establishing transparent reporting systems. It also proposes public-private partnerships, disaster risk insurance, and ESG-based swaps for sectors such as energy, water, and agriculture.

By combining these instruments with improved natural capital accounting and targeted policies—such as conservation fees and a green revolving fund the government aims to unlock new avenues for continuous climate investment.

If executed effectively, the NCFS could make Sri Lanka a regional leader in green finance, strengthen its sovereign credit profile, and attract sustainable funding critical for its economic recovery and environmental resilience.

20th March 2024 –

In a significant boost to Sri Lanka’s employment landscape, especially during its challenging economic times, a groundbreaking platform named 'Worky' is set to launch on March 20, 2024. Designed to bridge the gap between job seekers, part-time workers, students, and service seekers, 'Worky' is poised to revolutionize the way people find work and hire for services in Sri Lanka.

At its core, 'Worky' is a location-based service platform that allows prospective job seekers and part-time workers, including students, to register free of charge. This innovative app enables service seekers to log in and locate the nearest available worker, facilitating immediate bookings for a wide array of services. From traditional roles like plumbers and carpenters to new-age job functions such as dog walking and pet grooming, 'Worky' caters to a diverse range of employment opportunities, directly addressing the varied needs of Sri Lankan households. In light of the current economic downturn in Sri Lanka, where individuals are striving to make ends meet, 'Worky' offers a beacon of hope. By promoting a part-time job culture, the platform not only aids in finding jobs but also significantly boosts productivity across the nation. The convenience of locating talented workers for home needs, which was once a daunting task for many Sri Lankans, is now effortlessly managed through the 'Worky' app.

What sets 'Worky' apart is its user-friendly approach - the services on the platform are offered free of charge. Job seekers and workers can directly settle fees with the employers without any intermediation costs, ensuring transparency and fairness in the employment process.

As 'Worky' gears up for its launch, it is expected to rapidly become a household name, synonymous with productivity and prosperity at all societal levels in Sri Lanka. The platform anticipates attracting over a million members to its community within the first few weeks post-launch, a testament to its necessity and potential impact.

Gone are the days of tireless searching for job opportunities or the right talent for specific tasks. With 'Worky', a new era dawns on the Sri Lankan work culture, promising prosperity and ease for both job seekers and service seekers alike. Registering on 'Worky' is seamless and free of charge, offering an unparalleled opportunity for Sri Lankans to enhance their livelihoods and meet the evolving demands of the labor market.

About 'Worky':

'Worky' is a pioneering platform designed to meet the dynamic needs of the Sri Lankan job and service market. It enables job seekers and part-time workers to connect with service seekers efficiently, fostering a culture of productivity and growth. For more information, visit www.worky.lk -

ENDS- For media inquiries, please contact: This email address is being protected from spambots. You need JavaScript enabled to view it. Join us in transforming the future of work in Sri Lanka. Discover more at www.worky.lk

The Sri Lankan Government is intensifying efforts to translate its climate commitments into tangible results by actively engaging the private sector to mobilise large-scale financing for its ambitious green transition. The move comes as the country faces soaring costs to meet its updated Nationally Determined Contributions (NDCs) under the Paris Agreement, with mitigation needs alone estimated at over US$10 billion between 2021 and 2030—and rising as new emission targets are adopted.

Speaking at the launch of the National Climate Finance Strategy (NCFS) last Friday, UNDP Sri Lanka Resident Representative Azusa Kubota urged policymakers to act swiftly, warning that the cost of inaction would be “unimaginable” for an economy deeply dependent on natural resources such as agriculture, fisheries, and tourism. She noted that climate change touches every facet of development from public health and infrastructure to livelihoods—making climate finance central to achieving the Sustainable Development Goals (SDGs).

Kubota praised the NCFS as a crucial roadmap for aligning domestic and international resources with Sri Lanka’s long-term sustainability goals. The framework, she said, provides a clear signal to global investors that the country has established credible governance, financial systems, and accountability mechanisms to support green investments.

The government’s new approach aims to blend public and private finance, leveraging private sector innovation and efficiency to accelerate climate action. Kubota emphasized that no single institution or actor can drive this transformation alone, underscoring the importance of partnerships between state institutions, corporations, and multilateral donors.

She urged the government to introduce policy and regulatory reforms to attract private investmen particularly through de-risking tools, tax incentives, and transparent project pipelines. Globally, private climate finance surpassed US$1 trillion in 2023, outpacing public sector funding for the first time, a shift Sri Lanka hopes to emulate by fostering confidence among investors through predictable frameworks and performance-based incentives.

The Finance Ministry, supported by the UK Government, UNDP, and Asian Development Bank (ADB), is spearheading the implementation of the NCFS. Proposed mechanisms such as a Green Development Fund are expected to channel investments into renewable energy, sustainable agriculture, and biodiversity protection, while ensuring alignment with global Environmental, Social, and Governance (ESG) principles.

Kubota described the strategy as a “motherboard” to coordinate inter-agency efforts, reduce duplication, and attract capital. She stressed that Sri Lanka’s success depends on the collective will to align and act, ensuring that “every rupee and dollar invested delivers maximum impact for people and the planet.”

If effectively implemented, the NCFS could position Sri Lanka as a regional leader in sustainable finance, catalyzing a shift where private enterprise becomes a key driver of the nation’s low-carbon, climate-resilient future.

Sri Lanka’s consumer price inflation rate rose to 4.2% year-on-year in December from 2.8% in November, the statistics department said on Monday.

The National Consumer Price Index (NCPI) captures broader retail price inflation and is released with a lag of 21 days every month.

Food prices rose 1.6% in December after falling 2.2% in November on the year, the Department of Census and Statistics said in a statement.

Prices for non-food items, however, fell 6.3% in December from 7.1% year-on-year in November.

Sri Lanka racked up record high inflation last year after its economy was pummelled by the worst financial crisis in decades, triggered by a plunge in foreign exchange reserves.

Source - Reuters

• Agencies

Sri Lanka’s tourism sector demonstrated continued year-on-year growth in October, welcoming 137,876 tourists in the first 26 days of the month.

This figure represents a robust 21.8 percent increase, compared to the 113,189 arrivals recorded during the equivalent period in 2024.

This positive monthly performance has contributed to a cumulative total of 1,863,370 tourist arrivals for the year as of October 26, 2025. On a year-to-date basis, the industry has seen a 16.6 percent expansion from the 1,597,997 arrivals registered by the same date last year.

However, despite this steady growth, an analysis of recently published growth scenarios by the Sri Lanka Tourism Development Authority (SLTDA) suggests the country is facing challenges in meeting its full-year targets.

The SLTDA’s 2025 projections outline three potential outcomes: a ‘Lower Scenario’ of 2.415 million arrivals, a ‘Conservative Scenario’ of 2.676 million and an ‘Optimistic Scenario’ of 3.0 million.

With the current year-to-date total at 1.86 million, Sri Lanka is tracking behind the pace required to meet these goals. The 137,876 arrivals recorded in the first 26 days of October are lagging the full-month projection of 162,562 set for the Lower Scenario and the 176,381 projected for the Conservative Scenario. Given this trajectory, Sri Lanka appears likely to fall short of the 2.676 million Conservative target and will need a significant surge in November and December to meet even the 2.415 million Lower Scenario target.

India continues to be the primary engine of this growth, dominating the arrival figures. In the first 26 days of October, India accounted for 41,095 tourists, representing a 29.8 percent share of all arrivals.

Other key markets for the month included the United Kingdom, with 11,033 tourists (8 percent share), China (9,599 tourists, 7 percent share), the Russian Federation (8,507 tourists, 6.2 percent share) and Germany (7,956 tourists, 5.8 percent share).

This market dominance is reflected in the year-to-date data as well. From January 01 to October 26, 2025, arrivals from India totalled 416,387, making it the largest contributor to the 1,863,370 total arrivals.

The top five for the year are rounded out by the United Kingdom (172,926), Russian Federation (130,651), Germany (114,944) and China (111,189). (NF)

(Source - Dailymirror)

Sri Lanka’s control body for organic agriculture - the National Organic Control Unit (NOCU), operating under the aegis of the Sri Lanka Export Development Board (EDB), has taken a significant step towards promoting and regulating Sri Lanka's organic agriculture sector with the launch of its official website - www.nocu.lk. This website development was done through the project support to Small and Medium Enterprises in the Organic Agriculture Sector in Sri Lanka which was jointly co-financed by the EU and BMZ implemented by GIZ Sri Lanka. The inauguration ceremony was held at the EDB headquarters with the presence of dignitaries.

Honourable dignitaries included the Head of Cooperation at the EU delegation to Sri Lanka and the Maldives, Dr. Johann Hesse, and representatives from the GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH), EDB Chairman Dr. Kingsley Bernard, and Acting Director General Ms. Malani Baddegamage. Officials graced the momentous occasion.

The objectives of NOCU are manifold, including safeguarding the credibility of organic agriculture products within the domestic and international markets, the implementation of Sri Lanka Organic Regulations, as well as the promotion of organic agriculture systems. The establishment of an official website was deemed imperative to facilitate communication with stakeholders and provide essential information, thereby fostering a sustainable organic agriculture ecosystem in Sri Lanka.

The website - www.nocu.lk - will serve as the primary interface for NOCU to directly engage with stakeholders. This digital platform will enable NOCU to implement an effective communication strategy, ensuring transparent and efficient interactions with all the relevant parties and the online registration of stakeholder The launch of www.nocu.lk represents a significant milestone in Sri Lanka's organic agriculture journey, solidifying its commitment to ensure the highest standards of organic practices and fostering sustainable organic agricultural systems. With this dedicated online platform, NOCU is poised to connect with stakeholders, disseminate vital information, and fortify Sri Lanka's reputation as a trusted source of organic agricultural products in the local and international marketplace.

Sri Lanka’s recovery over the past year reads like a narrow escape rendered into a cautious, albeit unfinished success story. After the calamitous months of 2022, when foreign-exchange reserves and fuel imports evaporated and the country teetered on the brink of sovereign default, the island has staged a visible turnaround.

But the recovery remains fragile, uneven and is to some extent still dependent on external lifelines and domestic reforms.

The clearest headline is growth. After contracting sharply during the crisis, the economy expanded robustly in 2024, with GDP growth estimated at around 5%, according to the IMF and Sri Lanka’s Department of Census and Statistics (IMF Country Report No. 24/87) at the time - a figure that surprised many international forecasters and reflected a rebound in services and agriculture.

That recovery has continued into 2025: domestic demand has revived, manufacturing output has climbed, and tourism arrivals exceeded 2mn in the first eight months of the year, according to Reuters a month ago – in the process bringing much-needed foreign currency back to the island.

Authorities in Colombo have also succeeded in meeting key IMF programme conditions, and unlocking successive tranche disbursements under the $2.9bn Extended Fund Facility (EFF) approved in 2023. Those funds, alongside stronger remittance inflows which rose to $6.4bn in 2024, up 12% year on year, according to Central Bank of Sri Lanka (CBSL) data, have helped rebuild official foreign-exchange buffers and stabilise the rupee after years of volatility.

“We are now in a position of relative stability,” Central Bank Governor Nandalal Weerasinghe told Reuters, adding that “discipline and structural reforms” were key to avoiding backsliding.

Yet beneath the surface, macroeconomic stability remains a work in progress. Both the IMF and the World Bank’s Sri Lanka Development Update of June 2025, stress that near-term gains rest on continued fiscal consolidation and structural reform rather than a one-off rebound.

As such, the World Bank cautions that, while inflation has turned positive again and consumer demand is firming, financing pressures persist. The government in Colombo faces steep short-term refinancing needs, and public debt remains above 100% of GDP even after restructuring. The Bank warned that “growth without sustained fiscal repair would be precarious,” noting that one in four Sri Lankans remains vulnerable to poverty.

Rasika Hapuarachchige

The banking sector tells a similar story of cautious improvement. The Central Bank’s Financial Stability Review 2025 highlights that profitability, capital adequacy and liquidity ratios have strengthened from crisis lows, aided by lower provisioning and improved net interest margins.

Market liquidity also improved during the first half of 2025, while non-performing loans (NPLs), which peaked at 13% in 2023, have fallen to below 9%, helped by restructuring and recovery. The CBSL’s Banking Soundness Index shows a more stable system than at any time since 2021.

But vulnerabilities remain. Local banks’ exposure to government securities, which account for nearly 40% of total assets, leaves them highly sensitive to fiscal risks. Lending growth, particularly to small and medium enterprises, remains subdued. The IMF’s second review of August 2025, urged Colombo to strengthen banking supervision and diversify capital markets to reduce systemic risk. “The scars of 2022 haven’t fully healed,” one senior banker reportedly told Reuters. “The sector is stronger, but still wary.”

Tilan Weerasinghe

Foreign-exchange reserves – a key aspect of the economy for an import-dependent island - have recovered from near-zero levels in 2022 to roughly $5bn by mid-2025, according to CBSL monthly balance reports. This rebound reflects IMF disbursements, improved remittances, and resumed access to international capital markets following debt restructuring with China, India and Paris Club creditors. The improvement has reduced the acute risk of import stoppages that once led to nationwide fuel queues and the much-hated rolling blackouts.

However, reserves remain modest relative to import requirements, covering just over three months of imports, according to IMF data, and any deterioration in the balance of payments could again prove destabilising. Fiscal consolidation, particularly through improved tax collection, remains vital. The government’s goal of raising tax revenue to 15% of GDP by 2026 (from 9.1% in 2023) will be crucial to maintaining debt sustainability, according to the Finance Ministry’s 2025 Budget Statement.

To this end, the energy sector encapsulates both the progress and fragility of the recovery. The Ministry of Power and Energy in Sri Lanka reported that total electricity generation reached approximately 17,364 GWh in 2024, with renewables - primarily hydro and solar - accounting for nearly 48%. The Ceylon Electricity Board’s (CEB) Long-Term Generation Expansion Plan (2024–2043) outlines a shift towards renewables, with 70% of generation expected to come from non-fossil sources by 2030.

Yet the grid’s weaknesses were exposed again in early 2025 when a nationwide blackout plunged the island into darkness for nearly 48 hours, Reuters reported at the time. The outage underscored the urgent need to modernise transmission systems and improve grid resilience. The government has since pledged a $200mn grid modernisation plan, partly financed by the Asian Development Bank, but implementation has lagged.

Another issue is that for ordinary Sri Lankans, the recovery’s texture remains uneven. Inflation, which had soared above 70% in 2022, has now stabilised at around 4–5%, according to CBSL’s September 2025 inflation report. Food and fuel prices have moderated, and the Central Bank has cautiously reduced policy rates from 11% to 9% to spur consumption. Yet fiscal consolidation has come with painful trade-offs. Increases in VAT (to 18%) and cuts to fuel and electricity subsidies have disproportionately affected lower-income households. The World Bank estimates that national poverty, while improving, remains above the 25% mark, underscoring the recovery’s social fragility.

The government of President Anura Kumara Dissanayake faces a delicate balancing act: maintaining fiscal discipline without igniting social unrest ahead of elections expected in 2026. Investor confidence has strengthened with Fitch Ratings signalling potential upgrades if reform momentum continues, but the risk of populist policy reversals looms large.

 

So where does Sri Lanka go from here? The optimistic path is clear: maintain IMF-backed fiscal discipline, broaden the tax base, accelerate investment in renewable energy and digital infrastructure, and strengthen social safety nets to ensure inclusive growth. But the darker scenario of reform fatigue, renewed external shocks, or pre-election spending unravelling much of what has been rebuilt, is an ever present danger.

 

(Mark Buckton - Intellinews)

Cover photo - KlikX Photography

Brand new SENARO GN 125 motorcycles were donated to the President’s Office this morning (15). The assembly of these bikes followed the Standard Operating Procedure (SOP) that was introduced by the Ministry of Industry for manufacturing, assembling, and producing vehicle components in Sri Lanka.

President Ranil Wickremesinghe was officially given the keys and accompanying documents by Senaro Motor Corporation Managing Director Mr. Roshana Waduge.

The newly built assembly factory in the Yakkala area has been producing the SENARO GN 125 motorcycle with 35% value addition through locally produced spare parts, thanks to Senaro Motor Company Pvt. Ltd. The company has invested Rs. 1.5 billion in this venture, with the full financial support of the Bank of Ceylon. The goal is to increase the value addition to 50% in the near future and create more than 160 direct job opportunities.

Introduced to the Sri Lankan market, the SENARO GN 125 motorcycle is now a force in reviving the local economy and adding new energy to local enterprise.

Chairman of the Bank of Ceylon, Ronald C. Perera (PC), General Manager Russell Fonseka, Deputy General Manager Rohana Kumara, Director, Senaro Motor Company Mohan Somachandra and other officials were present on this occasion.

Charith Silva, the visionary behind Sri Lanka’s most-watched YouTube channel Wild Cookbook, has earned a coveted spot on the Forbes 30 Under 30 Asia list under the Art category, a milestone achievement that places Sri Lankan digital creativity on the global map.

Silva, whose rustic outdoor cooking videos have captivated millions, launched Wild Cookbook in 2020, during the height of the COVID-19 pandemic.

What began as a modest project born out of passion and necessity has since become a cultural and digital sensation, with over 10 million YouTube subscribers and 2.3 million Instagram followers.

Recognized by Forbes for his artistic storytelling and innovative approach to content creation, Silva joins a select group of young trailblazers across Asia celebrated for pushing boundaries and shaping the future of the arts.

His videos often blend traditional Sri Lankan recipes with contemporary twists, offering global audiences a window into the island’s rich culinary heritage.

To date, Silva has produced more than 600 videos, each one combining authenticity, creativity, and a deep reverence for nature.

“This recognition is not just about me. It’s about Sri Lankan food, culture, and the power of staying true to your roots,” Silva said in a recent post following the announcement.

In November 2024, Silva took his vision offline, opening Wildish, a rustic-themed restaurant in Colombo designed to bring the spirit of his wild cooking experience into the heart of the city.

The eatery has since become a hotspot for food lovers seeking a taste of his unique style in a curated, immersive setting.

Silva's rise reflects a broader shift in how Sri Lankan creators are engaging global audiences with local stories.

His journey is a testament to how digital platforms, when used with originality and purpose, can elevate national identity and creativity onto the world stage.

The selling price of the US dollar which was at Rs. 380 in commercial banks yesterday (12) morning has come down to Rs. 365 today (13).

With the appointment of Ranil Wickremesinghe as the new Prime Minister, the optimistic situation regarding political and economic stability seems to have contributed to the strengthening of the rupee.