Business
External sector battled strong headwinds in 2020: Central Bank
Supported by timely policy measures undertaken by the government and the Central Bank, the external sector battled strong headwinds in 2020, the Central Bank of Sri Lanka said last week releasing its Annual Report for the Year 2020.
“The slump in merchandise exports due to the mobility restrictions and lockdown measures was swiftly overcome, demonstrating the resilience of Sri Lankan
exporters.Accordingly, export earnings rebounded within a relatively short span of time to reach pre-pandemic levels. Measures to curtail non-essential imports, together with the significantly low global petroleum prices, helped reduce the import expenditure in 2020, resulting in a notable improvement in the trade deficit. The
tourism sector was severely affected by global travel restrictions. Foreign inflows, in terms of trade in servicesrelating to the Information Technology and Business Process Outsourcing (IT/BPO) sector, recorded a significant improvement,
supported by the surge in novel work arrangements amidst the pandemic,” the report said.
“The complex challenges encountered by the Sri Lankan economy in 2020 were efficaciously addressed through extraordinary policy interventions by the Government and the Central Bank.These interventions were essential to mitigate the socioeconomic impact of the spillovers of the COVID-19 pandemic and the resultant scarring of households and enterprises. Such interventions were also required to uphold the confidence in the economy, thereby averting acute stresses on macroeconomicand financial system stability.”
“Alongside the global economic downturn induced by the pandemic, the Sri
Lankan economy contracted by 3.6 per cent in real terms in 2020, recording the deepest recession since independence. Mobility restrictions and other containment measures imposed locally and internationally, with a view to preventing the spread
of COVID-19, hampered real economic activity across all sectors. The sharp contraction observed in Industry activities during the year was driven by the
significant slowdown in construction and manufacturing activities. Services activities also registered a notable contraction due to the pandemic driven deceleration in transportation, other personal services, and accommodation, food and beverage services.”
“The Agriculture sector, too, registered a contraction during the year as the impact of the pandemic outweighed the positive effects of timely policy support and favourable weather conditions. Investment expenditure contracted in
2020, reflecting subdued investor sentiments, while consumption expenditure displayed a marginal growth.”
“The contraction of investment expenditure exceeded the reduction in national savings, resulting in a decline in the savings-investment differential in 2020.
Meanwhile, the unemployment rate rose above 5 per cent for the first time since 2009, with a decline in the labour force participation rate, in the wake of uncertainties surrounding the pandemic. Reflecting the combined effect of the contraction in Gross Domestic Product (GDP) at current market prices and the depreciation of the Sri Lankan rupee against the US dollar, GDP per capita declined to US dollars 3,682 in 2020 from US dollars 3,852 in the previous year,” the Central Bank annual report said.
Business
EU’s new anti-greenwashing rules pose major challenge for Sri Lankan exporters
Countdown to September 2026 begins
Sri Lankan exporters selling into Europe may soon face one of the most significant regulatory shifts in recent years as the European Union prepares to enforce sweeping new rules aimed at eliminating ‘misleading’ environmental and sustainability claims.
The regulation, known as the Empowering Consumers for the Green Transition Directive (EmpCo) – Directive (EU) 2024/825, will become fully enforceable across all EU member states from September 27, 2026. While the directive is primarily designed to protect European consumers from so-called ‘greenwashing,’ and it carries important implications for exporters worldwide, including those in Sri Lanka.
Compliance experts warn that many local businesses remain largely unaware of the new requirements despite their potential impact on market access, brand reputation, and regulatory compliance.
The directive introduces a simple but demanding principle: companies must be able to substantiate environmental and sustainability claims with credible evidence. Generic descriptions such as ‘eco-friendly,’ ‘green,’ ‘sustainable,’ ‘responsible,’ ‘carbon neutral,’ or ‘climate friendly’ may no longer be used freely unless they can be verified through reliable data and supporting documentation.
For Sri Lankan exporters, this represents a significant shift. Sustainability claims increasingly appear on product packaging, websites, social media campaigns, annual reports, tourism marketing materials, and corporate communications. Under the new framework, such claims could face scrutiny from regulators, consumers, retailers, and civil society groups.
The directive also places particular emphasis on future environmental commitments. Claims such as ‘Net Zero by 2040’ or ‘Carbon Neutral by 2030’ may require businesses to demonstrate clear implementation plans, measurable milestones, and systems for monitoring progress rather than relying on aspirational statements alone.
An environmental compliance expert told The Island Financial Review that this transforms sustainability from a communications exercise into a governance issue. “Responsibility will no longer rest solely with sustainability departments. Company directors, senior executives, marketing teams, procurement professionals, and compliance officers will all have roles to play in ensuring that public claims can withstand regulatory scrutiny. The potential costs of non-compliance are considerable. Under the directive, penalties may include fines of up to four percent of annual turnover generated within the relevant EU member state, restrictions on marketing activities, increased regulatory investigations, and challenges from consumer organisations and commercial partners.”
“The reputational consequences may prove even more damaging. In highly competitive export markets, trust has become a critical business asset. Companies found to be making unsubstantiated environmental claims could face long-term damage to relationships with buyers, retailers, and consumers.”
“The timing is particularly important for Sri Lankan businesses because compliance preparations, reporting frameworks and adjustments are needed before the enforcement date arrives.”
“Businesses supplying European markets are therefore being encouraged to begin assessing their exposure now rather than waiting until the last minute. Early preparation could help exporters safeguard market access, maintain buyer confidence, and strengthen their competitive position in an increasingly sustainability-conscious global economy.”
“For Sri Lanka’s export sector, the message from Europe is becoming increasingly clear: sustainability claims will no longer be judged by how compelling they sound, but by how convincingly they can be proven,” he said.
As the countdown to September 2026 begins, exporters may need to ask themselves a critical question: Are their sustainability claims ready for a new era of accountability?
By Sanath Nanayakkare
Business
University of West London opens Sri Lanka’s first full UK university branch campus
The University of West London (UWL) has formally opened the University of West London Sri Lanka Branch Campus, the country’s first full UK university branch campus, marking a landmark development in Sri Lanka’s higher education sector.
The University of West London Sri Lanka Branch Campus is designed to bring a UK university learning experience closer to students in Sri Lanka. The campus is operated by ANC Campus, a pioneer in the higher education sector in Sri Lanka with over two decades of experience in delivering internationally recognised education.
The University of West London Sri Lanka Branch Campus gives students the opportunity to study towards world-class UK degrees while remaining close to home. Academic delivery, assessment and quality assurance will be aligned with University of West London standards, with the University maintaining academic oversight of its courses and awards. Students will have access to UWL-approved programmes, academic support, learning resources and a campus environment designed to promote academic success, confidence and employability.
Business
Xiaomi Store powered by Abans opens at One Galle Face Mall
Xiaomi Sri Lanka, marked a significant day in the brand’s local journey with the launch of the all-new Xiaomi 17T and the grand opening of the new Xiaomi Store powered by Abans at One Galle Face Mall, Lower Ground.
This occasion reflects the brand’s growing presence in the country and its commitment to bringing smarter technology, connected devices and immersive customer experiences closer to Sri Lankan consumers.
Held under the theme “Step into a smarter world with Xiaomi,” the launch event welcomed media, partners, technology enthusiasts and customers to experience Xiaomi’s latest innovation and wider smart ecosystem. The new store at One Galle Face Mall powered by Abans has been designed to give customers a hands-on experience across Xiaomi smartphones, smart home products, lifestyle technology and connected devices, supported by Abans’ strong retail presence and customer service network.
Commenting on the milestone, Kain Wang, Country Head, Xiaomi Sri Lanka, said, “17th June is a significant day for Xiaomi in Sri Lanka as we celebrate two important milestones together: the launch of the Xiaomi 17T and the opening of our new Xiaomi Store powered by Abans at One Galle Face Mall. This reflects the strength of Xiaomi’s journey in Sri Lanka and our continued commitment to offering innovation, performance and smarter lifestyle experiences to local consumers. With Xiaomi 17T, we are bringing advanced Leica imaging, powerful performance and long-lasting battery life to users who want to do more with their smartphones. At the same time, our new store creates a dedicated space for customers to experience the Xiaomi ecosystem in a more personal and engaging way.”
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