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Economic stability remains fragile while cheaper fuel could be expected in coming weeks

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Favourable world oil prices could mean cheaper fuel for Sri Lankans in the coming weeks

As August 2025 unfolds, Sri Lanka’s economy presents a mixed picture with glimmers of recovery shadowed by persistent challenges. The Central Bank’s latest report reveals a delicate balancing act: while falling oil prices and rising foreign income offer relief, mounting government debt and borrowing costs remind Sri Lankans that stability is still fraught with vulnerabilities.

Global oil markets breathed a sigh of relief last week as fears of oversupply pushed prices downward. OPEC+, the powerful oil-producing alliance, announced plans to boost production in September, sending Brent crude down by $2.08 per barrel and WTI crude sliding by $2.32.

For Sri Lankans, this could mean cheaper fuel in the coming weeks – a small but crucial reprieve for households and businesses still grappling with high living costs.

The cost of loans inched up slightly, with the Average Weighted Prime Lending Rate (AWPR) rising to 8.25%, making business and personal loans marginally more expensive. Yet, the private sector isn’t slowing down – borrowing surged by Rs. 221.6 billion in June, a 17.9% jump from last year. This suggests businesses are investing, signaling renewed economic activity.

But while companies borrow to grow, the government continues to rely heavily on debt. Banks lent an additional Rs. 47 billion to the state in June, pushing total public debt to a staggering Rs. 29.48 trillion by April 2025 – up from Rs. 28.74 trillion just four months earlier. On a slightly positive note, public corporations like the CPC and CEB trimmed their borrowing by Rs. 1.1 billion, a small but meaningful step toward fiscal discipline.

Government finances showed modest improvement. Revenue climbed to Rs. 2.32 trillion in the first half of 2025, but spending remained high at Rs. 2.73 trillion.

The budget deficit narrowed to Rs. 405.6 billion, down sharply from Rs. 598.7 billion a year ago. This suggests better financial management, though the gap between income and expenditure remains a concern.

Tourism, a lifeline for Sri Lanka’s dollar reserves, brought in $318.5 million in July – a rebound from June’s $169.5 million, though still slightly below last July’s figures. Meanwhile, remittances from overseas workers rose to $697.3 million, providing much-needed support for the rupee. Foreign reserves now stand at $6.14 billion, bolstered partly by a swap arrangement with China’s central bank.

The Colombo stock market saw a minor dip, with the ASPI down 0.44% and the S&P SL 20 falling 1.18%, reflecting cautious investor sentiment. On the brighter side, banks had Rs. 88.52 billion in surplus liquidity, meaning more funds are available for lending – a sign that financial conditions are easing, albeit slowly.

An economist summing up the current status of the economy, told The Island Financial Review that Sri Lanka’s economy is walking a tightrope.

“Falling oil prices and stronger private sector borrowing hint at recovery, while soaring government debt underscores the need for long-term reforms. Tourism and remittances are healing, but their growth must accelerate to fully ease pressure on the rupee. Fuel may get cheaper, jobs could grow as businesses expand, and dollar inflows may steady prices. Yet, the weight of debt lingers. It is a reminder that true stability will require prudent policies, disciplined spending, and sustained economic momentum,” he said.



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Canada Day celebration highlights deepening Sri Lanka-Canada business ties

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H.C. Isabelle Martin

The vibrant celebration of Canada’s 159th National Day in Colombo brought together diplomats, government representatives, leading business executives and members of the Sri Lankan and Canadian communities, highlighting the growing strength of bilateral economic and commercial relations between Sri Lanka and Canada.

Hosted by the Canada Sri Lanka Business Convention (CanCham Sri Lanka), the event attracted one of the largest gatherings in its history, providing an important platform for business networking while celebrating the enduring friendship between the two countries.

Addressing the gathering, High Commissioner for Canada in Sri Lanka and the Maldives Isabelle Martin said Canada and Sri Lanka continue to enjoy a warm and expanding partnership built on shared values, people-to-people links, trade, investment and development cooperation.

“Canada Day is an opportunity not only to celebrate our country but also to celebrate the strong friendships and partnerships we have built with Sri Lanka.

The remarkable turnout this evening reflects the strength of those relationships and the growing collaboration between our two nations,” Martin said.

She noted that the close engagement between Canadian and Sri Lankan businesses continues to create new opportunities in trade, innovation, education, sustainable development and investment.

CanCham Sri Lanka officials said this year’s celebration was among the most successful Canada Day events ever organised by the Chamber, drawing an outstanding crowd and creating exceptional opportunities for business networking.

“What an incredible celebration of Canada Day. This was truly one of the most successful Canada Day celebrations in history, with an outstanding crowd and exceptional networking opportunities. It was wonderful to see so many distinguished guests, business leaders and community members come together,” the organisers said.

They thanked sponsors, partners, supporters and volunteers whose dedication ensured the success of the event.

The evening showcased Canada’s multicultural heritage while reaffirming the Chamber’s commitment to promoting stronger commercial links between Sri Lanka and Canada.

Guests representing a wide cross-section of industries exchanged ideas on expanding trade, investment and innovation partnerships.

Canada remains an important economic partner for Sri Lanka, with bilateral trade spanning apparel, agriculture, seafood, ICT services, education and professional services.

Canadian companies continue to explore opportunities in renewable energy, infrastructure, technology and sustainable development, while Sri Lankan exporters maintain a significant presence in the Canadian market.

Business leaders attending the celebration expressed confidence that closer collaboration between the two countries would further strengthen economic resilience and create new opportunities for investment, entrepreneurship and knowledge sharing.

The event concluded on a celebratory note, reaffirming the longstanding friendship between Canada and Sri Lanka and the shared commitment to fostering stronger business and people-to-people ties in the years ahead.

By Ifham Nizam

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Tokyo Cement inspires future-ready construction at BUILD BEYOND 2026 Technology Summit

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Senior Professor Priyan Mendis from the University of Melbourne, speaking at the ‘Build Beyond 2026 Summit

Tokyo Cement hosted ‘Build Beyond 2026 Summit’, a premier knowledge-sharing conference that brought together leading academics, civil and structural engineering experts and professionals of the Sri Lankan construction industry. The event featured keynote addresses by renowned construction technology specialists, Professor Shashank Bishnoi from the Indian Institute of Technology (IIT) Delhi-Abu Dhabi, and Senior Professor Priyan Mendis from the University of Melbourne.

The summit marked the second edition of the Build Beyond Engineering Technology Summit organized by the Tokyo Cement Group, designed to foster collaboration between academia and industry while highlighting global trends, innovations, and emerging technologies in cement and concrete. This year’s discussions focused on advancements in material science that are driving more sustainable and cost-efficient construction practices.

The event drew participation from state-sector authorities, research institutions, academia, engineering students, and public and private sector organizations, creating a dynamic platform for engagement across the construction industry. A key feature of the summit was a high-level panel discussion on “Building a Resilient and Sustainable Construction Future,” featuring several distinguished industry leaders.

The panel included Eng. Nissanka Wijerathne, the Secretary General/CEO of the Chamber of Construction Industry Sri Lanka (CCI), Founder and Deputy Chairman of Civil & Structural Engineering Consultants (Pvt.) Ltd.; Eng. Shiromal Fernando, the Chairman of CTBUH Sri Lanka and Vice President of the Green Building Council Sri Lanka, Adjunct Senior Lecturer at the General Sir John Kotelawala Defense University and visiting lecturer at the University of Moratuwa; Eng.

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ComBank and Carmart join forces to make Peugeot and Leapmotor vehicles more accessible

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Kapila Liyanage, Assistant General Manager – Personal Banking and Retail Products at Commercial Bank and Senake Amerasinghe, Managing Director of Carmart (Pvt) Ltd. exchange the agreement in the presence of representatives of the two companies.

Strengthening its commitment to making vehicle ownership more accessible and affordable, Commercial Bank of Ceylon has entered into a strategic partnership with Carmart (Pvt) Ltd. to offer specially structured leasing facilities for Peugeot and Leapmotor vehicles.

Formalised through a Memorandum of Understanding (MoU), the collaboration brings together the Bank’s expertise in flexible financing and Carmart’s portfolio of internationally recognised vehicle brands, creating a value-rich proposition for customers seeking to purchase new vehicles.

Under this MoU, valid until 30th June 2027, Commercial Bank will offer attractive interest rates, concessions on documentation charges, and a complimentary credit card with the first year’s annual fee waived. These benefits are designed to reduce upfront costs and ease the financial commitment associated with vehicle ownership.

With leasing facilities available through Commercial Bank’s island-wide branch network, a cross section of customers will be able to part-finance their vehicle purchases while structuring repayments to align with their income patterns, enabling greater financial flexibility.

Further enhancing the value proposition, Carmart (Pvt) Ltd. will offer customers a range of added benefits, including a complimentary full tank of fuel, free vehicle registration, and other exclusive privileges, making the overall vehicle ownership experience more rewarding.

The Bank said the partnership reflects its continued focus on delivering practical and customer-centric leasing solutions in collaboration with reputed vendors. By combining competitive rates with cost-saving concessions, the Bank aims to make vehicle ownership more attainable for both existing and new customers.

This collaboration is particularly significant in the current market context, as it offers customers the opportunity to benefit from preferential leasing terms while managing repayments in a way that suits their financial circumstances.

As a pioneer in leasing solutions, Commercial Bank continues to innovate through strategic alliances that enhance value, broaden choice, and support customers in achieving their lifestyle aspirations.

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