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Lanka’s economy shrank by record 7.8 percent last year

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(Al Jazeera)Sri Lanka’s crisis-hit economy shrank by a record 7.8 percent last year, official data shows, as the country struggles with its worst financial crisis in seven decades.

The island’s fourth-quarter gross domestic product (GDP) contracted by 12.4 percent, according to the figures released by the state-run census and statistics department on Thursday.Sri Lanka’s growth is expected to shrink by 3 percent this year, Moody’s Investors Service said on Monday but growth is expected to rebound in 2024.

An unprecedented economic crisis sparked huge protests in the island nation, culminating last July when a mob stormed the home of then-President Gotabaya Rajapaksa, forcing him to flee the country and resign.Since then, a new government has worked to repair Sri Lanka’s battered public finances and secure a sorely needed International Monetary Fund (IMF) bailout.

Last year’s contraction – the biggest in the country’s 75 years of independence – compared with 3.5 percent growth in 2021 and a 4.6 percent contraction in 2020 as the coronavirus pandemic hit.It was “caused by the deepening of the economic crisis … frequent power disruptions, shortages in fuel, raw materials, (and) foreign currency”, the census and statistics department said in a statement.

The data showed some improvement in Sri Lanka’s fiscal position with inflation moderating to about 50 percent in February, down from a record high of 69.8 percent in September.President Ranil Wickremesinghe has raised taxes and ended generous subsidies on fuel and electricity to boost government revenue after his predecessor defaulted on Sri Lanka’s $46bn foreign debt last year.

The reforms are a precondition of a $2.9bn rescue package from the IMF, which Sri Lanka expects to finalise next week.But the tax and price hikes have been roundly unpopular, triggering protests and industrial stoppages around the country.

About 40 trade unions warned on Thursday they planned a general strike next week if their demands for concessions on the austerity programme were not met.Sri Lanka aims to announce a debt-restructuring strategy in April and step up talks with commercial creditors ahead of an IMF review of a bailout package in six months, its central bank governor said last week.

Wickremesinghe has said Sri Lanka can expect to remain bankrupt until at least 2026 and insisted his government has no option but to implement the reforms demanded by the IMF.The census and statistics department said the agriculture sector shrank 4.6 percent last year, while industries contracted 16 percent, and services dropped 2 percent from a year earlier.

Sri Lanka’s economy shrank 11.8 percent in the July-September quarter from a year ago, the second-worst quarterly contraction ever for the country.

“These numbers are broadly in line with expectations. In the last three months of 2022, Sri Lanka was hit by very high inflation, fuel shortages and high interest rates,” said Sanjeewa Fernando, senior vice president of research at Asia Securities.

“For the rest of this year, with IMF funds expected, the central bank should be able to keep the currency strengthened, eventually reduce interest rates, and continue to see inflation ease.”



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Food Security is vital to ensuring a Nation’s Sovereignty and National Security – Prime Minister

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Prime Minister Dr. Harini Amarasuriya stated that, in the face of the turbulent global environment prevailing today, agriculture is confronting significant challenges, and that food security is a crucial factor affecting a country’s stability, sovereignty, and national security.

The Prime Minister made these remarks on 28 of April at the Waters Edge, Battaramulla, while addressing the National Youth Agripreneur Showvase and B2B connect Conference organised under the Smallholder Agribusiness Partnership Programme (SAPP), funded jointly by the International Fund for Agricultural Development (IFAD) and the Government of Sri Lanka. The programme aims to empower rural youth to engage in agribusiness ventures.

Addressing the gathering, the Prime Minister further stated:

“I commend the organisers for successfully conducting this event despite the various challenges faced by the country.

You are playing an important role in both the agricultural sector and the national economy. I am happy to witness talented agri-entrepreneurs such as yourselves.

Food security, founded on agriculture, directly impacts a nation’s national security. Concepts such as ’Grow and Sell’ contribute significantly to strengthening the production economy.

During the COVID crisis, as well as amidst the current conflicts in the Middle East, it has become evident that if countries lack food security, their economies become vulnerable. Even a minor decision taken by leaders can disrupt supply chains.

Climate change also poses serious challenges to agriculture. When climatic and environmental conditions become difficult to predict, agriculture itself is threatened. In such a context, your contribution as agri-entrepreneurs goes beyond earning an income. It is also a direct contribution to the nation’s food security and, consequently, to national security. Your talents and innovations are important not only to yourselves, but to the people of the country as a whole”.

The Prime Minister also expressed gratitude for the support extended by institutions such as IFAD and SAPP, and conveyed best wishes to the country’s creative entrepreneurial youth.

The occasion was attended by the Minister of Agriculture, Livestock, Land and Irrigation K.D. Lalkantha; Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe; Secretary to the Ministry of Agriculture, Livestock, Land and Irrigation D.P. Wickramasinghe; Additional Secretary of the Ministry Lathisha Priyanthi; Director of SAPP Sunimal Chandrasiri; and several other distinguished guests.

(Prime Minister’s Media Division)

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Explanation sought from AKD on ‘Russian energy supplies’

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Wasantha

The National Patriotic Front (NPF) has said the NPP government owes the public an explanation regarding the status of negotiations with Russia to secure energy supplies.

NPF General Secretary Dr. Wasantha Bandara said that Sri Lanka was in such a desperate situation, the current dispensation couldn’t, under any circumstances, miss the opportunity to reach consensus with Russia in this regard.

Dr. Bandara was responding to The Island query in the wake of the NPF, in a letter, dated 27 April, warning President Anura Kumara Dissanayake of the catastrophic consequences for the country if it failed to obtain energy supplies on affordable terms.

Alleging that various interested parties, within the government, and the Western diplomatic community, hindered the successful conclusion of an agreement/agreements between Sri Lanka and Russia, Dr. Bandara pointed out that those in authority seemed to have conveniently forgotten that Sri Lanka received two Russian delegations. In late March and early April 2026, Russian Deputy Energy Minister Roman Marshavin and Deputy Foreign Minister Andrey Rudenko, visited Colombo where the focus was on long-term fuel supplies, investment, and tourism.

Dr. Bandara said that Anura Karunatilleke, who succeeded Energy Minister Kumara Jayakody, embroiled in the coal scam, was yet to meet the Russian Ambassador in Colombo Levan Dzhagaryan, who wants to explore ways and means of expediting the process. Instead,

British High Commissioner Andrew Patrick meets Energy Minister
Karunatilleke and Deputy Civil Aviation Minister Janaka Ruwan Kodithuwakku

Karunatilleke and Deputy Civil Aviation Minister Janaka Ruwan Kodithuwakku recently met British High Commissioner Andrew Patrick, Dr Bandara said. Referring to BHC post that they discussed how Sri Lanka could maximise its ports and airports, including through existing and new UK partnerships, alongside UK support for green energy, particularly offshore wind, Dr. Bandara emphasised that the UK and EU struggling to meet their own energy demands couldn’t help Sri Lanka.

In the NPF letter to President Dissanayake, Dr. Bandara alleged that Sri Lanka could secure a barrel of Russian crude for USD 150 to 160 whereas procurement through India cost a lot more. The NPF emphasised the responsibility on the part of the NPP government to maintain close relations with China, Russia and Iran, Sri Lanka’s long-time friends.

The NPF has urged President Dissanayake to intervene without further delay to ensure national interest in this matter is given utmost importance.

Dr. Bandara pointed out that those in charge of coal procurement told a parliamentary committee how the trouble started after Sri Lanka moved from Russian coal to South African products through disgraced Indian firm Trident Chemphar Ltd. Dr. Bandara asserted that political parties, represented in Parliament, should take up this matter vigorously and shouldn’t be distracted by vile NPP strategies.

By Shamindra Ferdinando

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US reiterates its commitment to enhancing relations with Northern Sri Lanka

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The US Embassy in Sri Lanka, on April 26, celebrated the 15th anniversary of American Corner Jaffna (ACJ), highlighting its longstanding role in connecting communities in Northern Sri Lanka with the United States through programmes focused on education, innovation, and American values. The Embassy also inaugurated the new “Freedom 250 Pavilion,” part of the global Freedom 250 initiative commemorating 250 years of American independence, the Embassy said in a press release issued yesterday (27)

Speaking at the event, US Embassy Public Affairs Officer Menaka Nayyar said: “American Corner Jaffna reflects the United States’ commitment to sharing American values, culture, and ideas with the people of Northern Sri Lanka. On July 4, 2026, the United States will celebrate 250 years of independence—a milestone that highlights our founding ideals and partnerships around the world, including here in Jaffna. Through the new Freedom 250 Pavilion and our programs, we invite the community to engage with the United States and learn more about our history, society, and innovation.”

In 2025 alone, ACJ hosted nearly 400 programmes, reaching more than 10,000 participants. Located at No. 23, Athiyady Road, Nallur, Jaffna, American Corner Jaffna provides free access to resources on the United States, English language learning, educational advising, and skills-based programming.

Established in 2011, in partnership with the Jaffna Social Action Centre, American Corner Jaffna was created as a platform for direct engagement with local communities—offering opportunities to learn about the United States while building skills in critical thinking, leadership, and innovation.

Launched in the post-conflict period, the Corner has played a key role in connecting emerging leaders in Northern Sri Lanka with ideas, resources, and opportunities rooted in American experience and perspectives. The Freedom 250 Pavilion expands ACJ’s capacity to host interactive programmes and community events, reinforcing the Corner’s role as a dynamic space for collaboration, dialogue, and learning.

Individuals can take part in free programmes by visiting American Corner Jaffna in person, contacting the Corner at 021 222 0665 or via email at info@americancornerjaffna.com, and following American Corner Jaffna on Facebook (facebook.com/amcornerjaffna) for the latest updates on events, registration, and membership opportunities.

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