Features
Inflation – Public Enemy Number One

(An article based on the Keynote Address delivered by Dr. P. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, recently at the Annual Research Symposium 2023 of the University of Colombo. Part I of this article appeared yesterday.)
Sri Lanka’s disinflation process
The outcomes of the policy efforts discussed above have eventuated since late 2022. Sri Lanka’s inflation started moderating from its peak levels of around 70 per cent (year-on-year) in September 2022, marking the beginning of the country’s disinflation process. Accordingly, Colombo Consumer Price Index (CCPI, 2013=100) based headline inflation moderated to 57.2 per cent (year-on-year) by December 2022, and further decelerated in the nine months ending September 2023. The pace of deceleration in headline inflation was slower in Q1-2023 due to the impact of the electricity tariff revision. However, headline inflation decelerated sharply in Q2-2023, reaching single-digit levels in June 2023. The moderation in inflation continued thereafter as well, where CCPI based headline inflation eased to a low level of 1.3 per cent (year-on-year) by September 2023.
In terms of economic factors, this process was supported by subdued aggregate demand conditions due to tight monetary and fiscal policies, improvements in domestic supply conditions, improved external sector performance, some normalisation of global commodity prices, and the passthrough of such reductions to domestic prices. Statistically, the disinflation process was influenced by both the momentum effect and the base effect, with a higher contribution from the latter.
Over the medium term, following the rapid disinflation thus far in 2023, inflation is expected to stabilise at the targeted level of 5 per cent, supported by appropriate monetary policy measures, along with improving supply conditions. Moreover, Sri Lanka’s disinflation process is expected to turn around from September 2023, with the dissipating impact of the favourable base, thereby facilitating the convergence of inflation towards the targeted level. Although some upward movement in headline inflation is likely in the near term driven by the planned upward adjustments to administratively determined prices and tariffs, the impact of such measures is expected to be short-lived. Further, the ongoing geopolitical tensions in the Middle East and possible tax measures by the Government remain the major upside risks to inflation in the near term.
The new Central Bank legislation
The legislative framework introduced by the Central Bank of Sri Lanka Act, No. 16 of 2023 (CBA) would reinforce price stability in the period ahead, while ensuring that inflation expectations remain well anchored. The new Central Bank Act gives prominence to price stability by stating that the primary objective of the Central Bank shall be to achieve and maintain domestic price stability. In pursuing this primary objective, the Central Bank shall take into account, inter alia, the stabilisation of output towards its potential level. The other object of the Central Bank shall be to secure the financial system stability.
Under the CBA, there shall be a Monetary Policy Board of the Central Bank, which is charged with the formulation of monetary policy and implementation of a flexible exchange rate regime, in line with the flexible inflation targeting framework, in order to achieve and maintain domestic price stability. The creation of a separate decision-making body in addition to the Governing Board, signifies the importance placed on independent monetary policymaking for achieving domestic price stability by the new legislation.
Also, the CBA formally recognises flexible inflation targeting as the monetary policy framework and requires the signing of a monetary policy framework agreement setting out the inflation target to be achieved by the Central Bank. Accordingly, the Central Bank entered into an agreement with the Minister of Finance in October 2023, where it was stated that the Central Bank shall aim to maintain quarterly headline inflation rate at a target of 5 per cent with a margin of ±2 percentage points.
If the Central Bank fails to meet the inflation target by the margin determined in the Agreement for two consecutive quarters, the Monetary Policy Board shall submit a report to the Parliament through the Minister, which shall also be made available to the public, setting out the reasons for the failure to achieve the inflation target; the remedial actions proposed to be taken by the Central Bank; and an estimate of the time period within which the inflation target shall be achieved. These provisions, along with enhanced transparency and accountability, would ensure that inflation in Sri Lanka would be maintained at low and stable levels in the period ahead, thereby benefitting all stakeholders in the economy.
Concluding remarks
Headwinds due to consecutive economic shocks in recent years have severely affected Sri Lanka’s economic activity in 2022 and early 2023, inflicting hardships on individuals and businesses. The Government and the Central Bank implemented painful but unavoidable policy measures aimed at restoring macroeconomic stability. The near-term economic stabilisation measures implemented thus far are unprecedented and started delivering the expected positive outcomes. Inflation declined sharply to a little over 1 per cent (year-on-year) by September 2023 and is expected to hover around the targeted level over the medium term. External sector performance improved and the exchange rate appreciated in 2023. The IMF programme is progressing and the stability of the financial sector has been preserved amidst numerous challenges.
Monetary policy will remain focused on ensuring price stability over the medium term, while giving due regard to stabilising economic growth towards its potential, under a flexible inflation targeting policy framework. Going forward, the conduct of monetary policy will continue to be based on a forward-looking and data-driven approach, supported by recent and expected macroeconomic developments and projections, both domestic and global. Timely adjustments to policies and strategies of the Central Bank will be made under the flexible inflation targeting framework, as and when new information becomes available. Maintenance of inflation at a low and stable level would eliminate large swings in interest rates, thus creating an enabling environment for businesses.
The Central Bank of Sri Lanka Act would allow more independence to the Central Bank, limiting monetary financing, and thereby strengthening policies targeted at managing inflation and inflation expectations. With the primary object of the Central Bank being the maintenance of domestic price stability, the new Act will serve as a key buffer for the Sri Lankan economy against inflation. Moreover, the Central Bank remains committed to maintaining headline inflation at the targeted levels, thereby tackling inflation – public enemy number one transparently and proactively.
References
Barro, R., & Sala-i-Martin, X. (2004). Economic growth second edition.
Bernanke, B. S., Laubach, T., Mishkin, F. S., & Posen, A. S. (1999). Inflation Targeting: Lessons from the International Experience. Princeton University Press.
Clarida, R., Gali, J., & Gertler, M. (1999). The Science of Monetary Policy: A New Keynesian Perspective. Journal of Economic Literature, 37(4).
Mishkin, F. S. (2007). Monetary policy strategy. MIT press.
Moyo, J. (2023). In Zimbabwe, hyperinflation meets its match on the streets. Anadolu Ajansı. Available at: https://www.aa.com.tr/en/africa/in-zimbabwe-hyperinflation-meets-its-match-on-the-streets/2947674
Romer, D. (1993). Openness and inflation: theory and evidence. The quarterly journal of economics, 108(4), 869-903.
Svensson, L. E. O. (2010). Inflation Targeting. Handbook of Monetary Economics.
Features
RuGoesWild: Taking science into the wild — and into the hearts of Sri Lankans

At a time when misinformation spreads so easily—especially online—there’s a need for scientists to step in and bring accurate, evidence-based knowledge to the public. This is exactly what Dr. Ruchira Somaweera is doing with RuGoesWild, a YouTube channel that brings the world of field biology to Sri Lankan audiences in Sinhala.
“One of my biggest motivations is to inspire the next generation,” says Dr. Somaweera. “I want young Sri Lankans to not only appreciate the amazing biodiversity we have here, but also to learn about how species are studied, protected, and understood in other parts of the world. By showing what’s happening elsewhere—from research in remote caves to marine conservation projects—I hope to broaden horizons and spark curiosity.”
Unlike many travel and wildlife channels that prioritise entertainment, RuGoesWild focuses on real science. “What sets RuGoesWild apart is its focus on wildlife field research, not tourism or sensationalised adventures,” he explains. “While many travel channels showcase nature in other parts of the world, few dig into the science behind it—and almost none do so in Sinhala. That’s the niche I aim to fill.”
Excerpts of the Interview
Q: Was there a specific moment or discovery in the field that deeply impacted you?
“There have been countless unforgettable moments in my 20-year career—catching my first King cobra, discovering deep-diving sea snakes, and many more,” Dr. Somaweera reflects. “But the most special moment was publishing a scientific paper with my 10-year-old son Rehan, making him one of the youngest authors of an international peer-reviewed paper. We discovered a unique interaction between octopi and some fish called ‘nuclear-forager following’. As both a dad and a scientist, that was an incredibly meaningful achievement.”

Saltwater crocodiles in Sundarbans in Bangladesh, the world’s largest mangrove
Q: Field biology often means long hours in challenging environments. What motivates you to keep going?
“Absolutely—field biology can be physically exhausting, mentally draining, and often dangerous,” he admits. “I’ve spent weeks working in some of the most remote parts of Australia where you can only access through a helicopter, and in the humid jungles of Borneo where insects are insane. But despite all that, what keeps me going is a deep sense of wonder and purpose. Some of the most rewarding moments come when you least expect them—a rare animal sighting, a new behavioural observation, or even just watching the sun rise over a pristine habitat.”
Q: How do you balance scientific rigour with making your work engaging and understandable?
“That balance is something I’m constantly navigating,” he says. “As a scientist, I’m trained to be precise and data-driven. But if we want the public to care about science, we have to make it accessible and relatable. I focus on the ‘why’ and ‘wow’—why something matters, and what makes it fascinating. Whether it’s a snake that glides between trees, a turtle that breathes through its backside, or a sea snake that hunts with a grouper, I try to bring out the quirky, mind-blowing parts that spark curiosity.”
Q: What are the biggest misconceptions about reptiles or field biology in Sri Lanka?
“One of the biggest misconceptions is that most reptiles—especially snakes—are dangerous and aggressive,” Dr. Somaweera explains. “In reality, the vast majority of snakes are non-venomous, and even the venomous ones won’t bite unless they feel threatened. Sadly, fear and myth often lead to unnecessary killing. With RuGoesWild, one of my goals is to change these perceptions—to show that reptiles are not monsters, but marvels of evolution.”
Q: What are the most pressing conservation issues in Sri Lanka today?
“Habitat loss is huge,” he emphasizes. “Natural areas are being cleared for housing, farming, and industry, which displaces wildlife. As people and animals get pushed into the same spaces, clashes happen—especially with elephants and monkeys. Pollution, overfishing, and invasive species also contribute to biodiversity loss.”

Manta Rays
Q: What role do local communities play in conservation, and how can scientists better collaborate with them?
“Local communities are absolutely vital,” he stresses. “They’re often the first to notice changes, and they carry traditional knowledge. Conservation only works when people feel involved and benefit from it. We need to move beyond lectures and surveys to real partnerships—sharing findings, involving locals in fieldwork, and even ensuring conservation makes economic sense to them through things like eco-tourism.”
Q: What’s missing in the way biology is taught in Sri Lanka?
“It’s still very exam-focused,” Dr. Somaweera says. “Students are taught to memorize facts rather than explore how the natural world works. We need to shift to real-world engagement. Imagine a student in Anuradhapura learning about ecosystems by observing a tank or a garden lizard, not just reading a diagram.”
Q: How important is it to communicate science in local languages?
“Hugely important,” he says. “Science in Sri Lanka often happens in English, which leaves many people out. But when I speak in Sinhala—whether in schools, villages, or online—the response is amazing. People connect, ask questions, and share their own observations. That’s why RuGoesWild is in Sinhala—it’s about making science belong to everyone.”

‘Crocodile work’ in northern Australia.
Q: What advice would you give to young Sri Lankans interested in field biology?
“Start now!” he urges. “You don’t need a degree to start observing nature. Volunteer, write, connect with mentors. And once you do pursue science professionally, remember that communication matters—get your work out there, build networks, and stay curious. Passion is what will carry you through the challenges.”
Q: Do you think YouTube and social media can shape public perception—or even influence policy?
“Absolutely,” he says. “These platforms give scientists a direct line to the public. When enough people care—about elephants, snakes, forests—that awareness builds momentum. Policymakers listen when the public demands change. Social media isn’t just outreach—it’s advocacy.”
by Ifham Nizam
Features
Benjy’s vision materalises … into Inner Vision

Bassist Benjy Ranabahu is overjoyed as his version of having his own band (for the second time) is gradually taking shape.
When asked as to how the name Inner Vision cropped up, Benjy said that they were thinking of various names, and suggestions were made.
“Since we have a kind of a vision for music lovers, we decided to go with Inner Vision, and I guarantee that Inner Vision is going to be a band with a difference,” said Benjy.
In fact, he has already got a lineup, comprising musicians with years of experience in the music scene.
Benjy says he has now only to finalise the keyboardist, continue rehearsing, get their Inner Vision act together, and then boom into action.
“Various names have been suggested, where the keyboard section is concerned, and very soon we will pick the right guy to make our vision a reality.”
Inner Vision will line-up as follows…
Anton Fernando

Benjy Ranabahu:
Ready to give music
lovers a new vision
(Lead guitar/vocals): Having performed with several bands in the past, including The Gypsies, he has many years of experience and has also done the needful in Japan, Singapore, Dubai, the Maldives, Zambia, Korea, New Zealand, and the Middle East.
Lelum Ratnayake
(Drums/vocals): The son of the legendary Victor Ratnayake, Lelum has toured Italy, Norway, Japan, Australia, Zambia, Kuwait and Oman as a drummer and percussionist.
Viraj Cooray
(Guitar/vocals): Another musician with years of experience, having performed with several of our leading outfits. He says he is a musician with a boundless passion for creating unforgettable experiences, through music.
Nish Peiris

Nish Peiris: Extremely talented
(Female vocals): She began taking singing, seriously, nearly five years ago, when her mother, having heard her sing occasionally at home and loved her voice, got her involved in classes with Ayesha Sinhawansa. Her mom also made her join the Angel Chorus. “I had no idea I could sing until I joined Angle Chorus, which was the initial step in my career before I followed my passion.” Nish then joined Soul Sounds Academy, guided by Soundarie David. She is currently doing a degree in fashion marketing.
And … with Benjy Ranabahu at the helm, playing bass, Inner Vision is set to light up the entertainment scene – end May-early June, 2025.
Features
Can Sri Lanka’s premature deindustrialisation be reversed?

As politicians and economists continue to proclaim that the Sri Lankan economy has achieved ‘stability’ since the 2022 economic crisis, the country’s manufacturing sector seems to have not got the memo.
A few salient points need to be made in this context.
First, Sri Lankan manufacturing output has been experiencing a secular stagnation that predates external shocks, such as the pandemic and the Easter Attacks. According to national accounts data from UNIDO, manufacturing output in dollar terms has basically flatlined since 2012. Without a manufacturing engine at its core, it is no surprise that Sri Lanka has seen some of the lowest rates of economic growth during this period. (See graph)
Second, factory capacity utilisation still remains below pre-pandemic levels. Total capacity utilisation stood at 62% in 2024, compared to 81% in 2019. For wearing apparel, the country’s main manufactured export, capacity utilisation was at a meagre 58% in 2024, compared to 83% in 2019. Given the uncertainty Trump’s tariffs have cast on global trade, combined with the diminished consumer sentiment across the Global North, it is hard to imagine capacity utilisation recovering to pre-pandemic levels in the near future.
Third, new investment in manufacturing has been muted. From 2019 to 2024, only 26% of realised foreign investments in Board of Investment enterprises were in manufacturing. This indicates that foreign capital does not view the country as a desirable location for manufacturing investment. It also reflects a global trend – according to UNCTAD, 81% of new foreign investment projects, between 2020 and 2023, were in services.
Taken together, these features paint an alarming picture of the state of Sri Lankan manufacturing and prospects for longer-term growth.
What makes manufacturing so special?
A critical reader may ask at this point, “So what? Why is manufacturing so special?”
Political economists have long analysed the transformative nature of manufacturing and its unique ability to drive economic growth, generate technical innovation, and provide positive spillovers to other sectors. In the 1960s, Keynesian economist Nicholas Kaldor posited his famous three ‘growth laws, which argued for the ‘special place’ of manufacturing in economic development. More recently, research by UNIDO has found that 64% of growth episodes in the last 50 years were fuelled by the rapid development of the manufacturing sector.
Manufacturing profits provide the basis on which modern services thrive. London and New York could not have emerged as financial centres without the profits generated by industrial firms in Manchester and Detroit, respectively. Complex and high-end services, ranging from banking and insurance to legal advisory to logistics and transport, rely on institutional clients in industrial sectors. Meanwhile, consumer-facing services, such as retail and hospitality, depend on the middle-class wage base that an industrial economy provides.
Similarly, technologies generated in the manufacturing process can have massive impacts on raising the productivity of other sectors, such as agriculture and services. Indeed, in most OECD countries, manufacturing-oriented private firms are the biggest contributors to R&D spending – in the United States, 57% of business enterprise R&D spending is done by manufacturing firms; in China it is 80%.
It has become increasingly clear to both scholars and policymakers that national possession of industrial capacity is needed to retain advantages in higher value-added capabilities, such as design. This is because some of the most critical aspects of innovation are the ‘process innovations’ that are endemic to the production process itself. R&D cannot always be done in the comfort of an isolated lab, and even when it can, there are positive spillovers to having geographic proximity between scientists, skilled workers, and industrialists.
Produce or perish?
Sri Lanka exhibits the telltale signs of ‘premature deindustrialisation’. The term refers to the trend of underdeveloped countries experiencing a decline in manufacturing at levels of income much lower than what was experienced by countries that managed to break into high-income status.
Premature deindustrialisation afflicts a range of middle-income countries, including India, Brazil, and South Africa. It is generally associated with the inability of domestic manufacturing firms to diversify their activities, climb up the value chain, and compete internationally. Major bottlenecks include the lack of patient capital and skilled personnel to technologically upgrade and the difficulties of overcoming the market power of incumbents.
Reversing the trend of premature deindustrialisation requires selective industrial policy. This means direct intervention in the national division of labour in order to divert resources towards strategic sectors with positive spillovers. Good industrial policy requires a carrot-and-stick approach. Strategic manufacturing sectors must be made profitable, but incentives need to be conditional and based on strict performance criteria. Industrial can choose winners, but it has to be willing to let go of losers.
During the era of neoliberal globalisation, the importance of manufacturing was underplayed (or perhaps deliberately hidden). To some extent, knowledge of its importance was lost to policymakers. Karl Marx may have predicted this when, in Volume 2 of Das Kapital, he wrote that “All nations with a capitalist mode of production are, therefore, seized periodically by a feverish attempt to make money without the intervention of the process of production.”
Since the long depression brought about by the 2008 financial crisis, emphasis on manufacturing is making a comeback. This is most evident in the US ruling class’s panic over China’s rapid industrialisation, which has shifted the centre of gravity of the world economy towards Asia and threatened unipolar dominance by the US. In the Sri Lankan context, however, emphasis on manufacturing remains muted, especially among establishment academics and policy advisors who remain fixated on services.
Interestingly, between the Gotabaya Rajapaksa-led SLPP and the Anura Kumara Dissanayake-led NPP, there is continuity in terms of the emphasis on the slogan of a ‘production economy’ (nishpadana arthiakaya in Sinhala). Perhaps more populist than strictly academic, the continued resonance of the slogan reflects a deep-seated societal anxiety about Sri Lanka’s ability to survive as a sovereign entity in a world characterised by rapid technological change and the centralisation of capital.
Nationalist writer Kumaratunga Munidasa once said that “a country that does not innovate will not rise”. Amid the economic crises of the 1970s, former Prime Minister Sirimavo Bandaranaike popularised a pithier exhortation: “produce or perish”. Aside from their economic benefits, manufacturing capabilities are the pride of a nation, as they demonstrate skill and scientific knowledge, a command over nature, and the ability to mobilise and coordinate people towards the construction of modern wonders. In short, it is hard to speak of real sovereignty without modern industry.
(Shiran Illanperuma is a researcher at Tricontinental: Institute for Social Research and a co-Editor of Wenhua Zongheng: A Journal of Contemporary Chinese Thought. He is also a co-Convenor of the Asia Progress Forum, which can be contacted at asiaprogressforum@gmail.com).
By Shiran Illanperuma
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