Business
Sri Lanka’s ambitious budget agenda faces high implementation risks: Fitch Ratings
The targets laid out in Sri Lanka’s budget for 2024 will be challenging to meet even with the economic recovery that we expect to continue next year, says Fitch Ratings.
The fiscal deficit is set to be wider than our current forecast of 7.1% of GDP in 2024 in light of the new data, even after excluding bank recapitalisation costs, and the revenue/GDP ratio will be lower than we had assumed, Fitch says.
The report further states:
“The government is targeting a budget deficit of 9.1% of GDP in 2024, wider than a revised estimate of 8.5% in 2023. However, without bank recapitalisation costs, the deficit in 2024 would be a narrower 7.6% of GDP. Excluding recapitalisation costs, the budget targets a primary surplus of 0.8% of GDP in 2024, against a deficit of 0.7% in 2023. However, including recapitalisation costs pushes the 2024 primary deficit target to 0.6% of GDP.”
“The primary surplus goal for 2024, excluding bank recapitalisation, is broadly in line with the 0.8% of GDP projected by the IMF in March when it approved Sri Lanka’s USD3 billion Extended Fund Facility (EFF). We also see the revenue target as relatively aligned. However, the government’s expenditure target for 2024, at 22.2% of GDP, is somewhat higher than the 19.7% the IMF had envisioned and well above the revised budget estimate of 18.7% for 2023.”
“The release of the next tranche of EFF financing, worth around USD330 million, will depend partly on the IMF’s assessment of Sri Lanka’s progress in securing financing assurances from official creditors. Fitch believes there has been some progress since March, but the timeline for a restructuring deal with official creditors remains unclear.”
“Fitch believes there are significant risks to the government’s revenue goal for 2024. Sri Lanka has a record of fiscal slippage, and revenue collection fell 29% short of target over 9M23. The authorities aim to raise revenue by almost 45% in 2024. This will be aided by a planned 3pp increase in the value-added tax to 18%, but the boost to revenue from inflation is set to weaken in 2024. We project consumer prices will rise by 8.7% on average in 2024, compared with 22.1% in 2023. The lift from economic growth, which Fitch projects at 3.3% in 2024, will also be modest.”
“Downside risks to revenue could be offset by lower-than-budgeted spending. We think the presidential election in late 2024 will incentivise the government to keep to its spending plans, which include a 14% increase in spending on salaries and wages. Nevertheless, if revenue falls short, there may be some room to trim capital expenditure, which amounts to almost 20% of total planned spending and is budgeted to rise 55% in 2024, excluding bank recapitalization.”
“The government’s efforts to implement governance reform after a recent diagnostic study by the IMF may also support revenue collection. The budget proposes to establish a new revenue authority under the Ministry of Finance to improve tax collection, and a new investment law will look to establish a National Economic Commission to promote investment. However, it will take time to assess these bodies’ effectiveness,” Fitch says.
Business
IceWarp expands into Sri Lanka, fostering European innovation in collaboration with FentonsIT
IceWarp, a global leader in business communication solutions, has officially launched its cutting-edge platform in Sri Lanka, bringing European expertise in email and collaboration solutions to support the country’s evolving business landscape.
This expansion is driven by a strategic partnership with Fentons Information Technology (FIT), the Information Technology arm of Hayleys Fentons Limited.
The grand launch event held at The Kingsbury Colombo on 4th April, 2025, was graced by several distinguished guests, including Chief Guest Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC.
The presence of Adam Paclt, Global CEO of IceWarp, and Pramod Sharda, CEO for India and the Middle East of IceWarp, along with their global team, highlighted the significance of this expansion. Industry experts, government officials, corporate leaders, and CIOs from the banking, financial services and insurance sectors were in attendance as well, reflecting strong local interest in IceWarp’s European expertise.
With this launch, Sri Lankan businesses now have access to an affordable, scalable and secure alternative to Microsoft 365 and Google Workspace. IceWarp’s advanced Collaboration Suite integrates a wide range of tools into a single, unified platform designed to streamline communication and boost productivity. Offering flexible hybrid deployment options and cost-efficient solution, IceWarp enables organisations to optimise their operations without compromising security or functionality.
Ceylon Energy and HJT China have successfully completed the Mahiyangana-Kappalthurei 33kV power distribution lines and the Uhana Gantry as part of Sri Lanka’s Supporting Electricity Supply Reliability Improvement Project (SESRIP). Funded by the Asian Development Bank ($42 million), SESRIP aims to expand energy access in underserved regions, including conflict-affected areas and provinces like Uva and North Central.
The project’s infrastructure spans over 270 km of 33kV lines, 13 switching gantries, and 2,372 km of low-voltage extensions.
The projects connect 35,000+ households and improve reliability for 493,000+ consumers; integrates renewables to reduce losses.
The projects’ notable components include: Mahiyangana-Bibila Line: 36 km with 147 steel towers and Kappalthurei-Sixth Mile Post Line: 14 km with 58 towers.
Ceylon Energy Chairman Madushanka Fernando hailed it as a ‘new beginning of a brighter era’, emphasising the project’s role in uplifting rural communities and driving sustainable development.
The initiative underscores Sri Lanka’s commitment to inclusive, reliable energy and climate resilience.
Eventistry Sports, a trailblazer in innovative sporting events, has unveiled the Sri Lanka Padel League (SLPL), the nation’s first franchise-based padel tournament, set to debut in June 2025. This groundbreaking league promises to redefine Sri Lanka’s sports landscape by creating a dynamic national platform for athletes while fostering unity among fans, brands, and communities.
The SLPL will showcase six franchise teams, each embodying the spirit of iconic Sri Lankan locales: the Colombo Chargers, Yala Rangers, Hikkaduwa Riders, Ella Hawks, Arugambay Vipers, and Trinco Warriors. These teams will not only ignite regional pride but also unite the country through a shared passion for padel—a fast-paced racquet sport merging tennis and squash, played on enclosed courts.
“The SLPL is more than a league; it’s a movement,” declared Karin Wijeratne, Director of Eventistry Sports. “By blending franchise sports with Sri Lanka’s vibrant culture, we’re creating a platform where players gain national recognition, fans rally behind their hometown heroes, and brands engage with communities in meaningful ways.”
The league’s launch on June 21–23, 2025, at Colombo’s Padel House courts (CR&FC) will kick off with three days of high-octane matches, preceded by a star-studded player auction on May 16th at The Vault, Colombo City Centre. Local talent—both professional and intermediate—will be drafted by franchise owners, with international registrations now open to elevate the competition’s global appeal.
Please log in to: www.slpadelleague.com and social media: @SriLankaPadelLeague (Facebook & Instagram) for more information.
The sun will be directly overhead Colombo, Awissawella, Talawakelle, Dimbula, Galakumbura and Dambagalla at about 12:12 noon today [07]
Heavy rainfall of above 100 mm is likely at some places in Western, Sabaragamuwa, Central, Southern, Uva and North-central provinces and in Ampara district
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