Business
No populist budget expected, says analyst
Recent data from the Central Bank of Sri Lanka (CBSL) shows the government’s strenuous yet successful efforts towards fiscal consolidation following the 2022 economic crisis.
The figures confirm a significant turnaround in public finances, driven by robust revenue performance and targeted expenditure control under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) programme.
This revenue-based consolidation has been critical in restoring macroeconomic stability. However, a major challenge persists according to the data: the colossal burden of interest payments on the national debt.
Commenting on these trends, an economic analyst told The Island Financial Review that policy changes since mid-2022 are yielding substantial results after years of declining tax collection.
“The government’s revenue-to-GDP ratio has recovered strongly from its low point, demonstrating the efficacy of recent tax reforms,” he said. “This was achieved by enhancing the efficiency of tax administration and implementing rate adjustments, particularly with the revised Value Added Tax (VAT). This shift has bolstered the government’s ability to finance its operations and service its debt independently.”
Elaborating further, he noted mixed dynamics on the expenditure front. “While Non-Interest Expenditure as a share of GDP has been managed, signalling prudence in controlling operational spending, the overall expenditure profile remains dominated by the high cost of debt.”
“The core challenge is interest expenditure. Even as revenue grows, a disproportionately large share is immediately consumed by interest payments on the massive outstanding domestic and foreign debt,” he explained.
He pointed out that these high payments severely constrain the government’s capacity for vital capital investment and social welfare spending, effectively reducing the fiscal space available for economic stimulus.
“The sheer size of the debt means that interest payments will remain a major feature of the government’s fiscal dynamics for the foreseeable future, demanding continued fiscal discipline,” the analyst said.
He highlighted the attainment of a positive primary balance as the most significant achievement, marking a definitive turning point that validates the difficult fiscal measures undertaken in 2022-2023.
He concluded with a note of caution, stating that any policy reversal – particularly in tax revenue collection or expenditure control – could quickly undermine the progress made and push fiscal balances back into unsustainable territory.
“For Sri Lanka to fully exit the crisis, the government must continue to deepen tax administration reforms, maintain non-interest expenditure efficiency, and successfully execute its comprehensive debt restructuring programme. The fiscal sector’s performance is the cornerstone of the nation’s fragile recovery. In this context, the chances are remote that the upcoming Budget could be an ordinary people-friendly populist one.”
Presentation of Budget proposals for the year 2026 will be held on 7th November, 2025, followed by the budget debate from 8th November to 5th December, as decided by the Committee on Parliamentary Business.
By Sanath Nanayakkare
Business
Global regulators convene in Colombo for key IOSCO enforcement and cooperation discussions
The Securities and Exchange Commission of Sri Lanka (SEC) successfully hosted a series of high-level meetings of the International Organization of Securities Commissions (IOSCO), bringing together leading securities regulators and enforcement officials from around the world to discuss emerging regulatory challenges, strengthen international cooperation, and enhance collective efforts to combat cross-border securities market misconduct.
The meetings, held at the Hilton Colombo from 13 to 16 October 2026, included sessions of the IOSCO Enforcement and Cooperation Committee and its Screening Group (Committee 4/SG), as well as meetings of the Monitoring Group and the Steering Committee. The event attracted approximately 50 senior representatives from securities regulators and exchanges across several jurisdictions, including Australia, Japan, the United States, the United Kingdom, France, Italy, Canada, New Zealand, India, Germany, Belgium, Singapore, China and Spain, reflecting the global significance of the discussions and the growing importance of international regulatory collaboration.
Welcoming delegates to Sri Lanka, Senior Professor D.B.P.H. Dissabandara, Chairman of the SEC, emphasized the critical role of international cooperation in safeguarding market integrity and investor confidence in an increasingly interconnected financial landscape.
“No regulator can effectively address cross-border misconduct in isolation. The speed with which information, transactions and illicit activities can move across borders requires an equally coordinated and timely regulatory response. Strong international cooperation, effective information sharing and mutual trust among regulators are essential to maintaining fair, transparent and resilient capital markets,” he stated.
The discussions focused on a range of enforcement and cooperation matters, including mechanisms for enhancing cross-border information exchange, strengthening investigative collaboration among regulators, addressing increasingly sophisticated forms of securities fraud and market abuse, and promoting the effective implementation of international standards and best practices. Participants also exchanged experiences and insights on emerging enforcement challenges arising from technological developments, digitalization of financial services, and increasingly interconnected global markets.
IOSCO is recognized as the leading international body that brings together the world’s securities regulators and serves as the global standard setter for securities regulation. Through its policy work and cooperative initiatives, IOSCO plays a central role in promoting investor protection, ensuring that markets are fair, efficient and transparent, reducing systemic risk, and strengthening confidence in capital markets worldwide.
Sri Lanka has maintained a strong and active relationship with IOSCO for more than three decades. The SEC became an Ordinary Member of IOSCO in 1993 and has been a signatory to the IOSCO Multilateral Memorandum of Understanding (MMoU) since 2004. The MMoU is the internationally recognised benchmark for cooperation and information sharing among securities regulators and serves as a critical tool in facilitating cross-border investigations and enforcement actions.
Business
Pan Asia Bank partners Ideal Motors to offer leasing solutions
Pan Asia Bank recently entered into a one-year Memorandum of Understanding (MOU) with Ideal Motors (Pvt) Ltd, creating a new financing avenue for customers purchasing vehicles from the authorised Mahindra dealer. The strategic partnership will enable customers of Ideal Motors to access leasing facilities from Pan Asia Bank, making vehicle financing more convenient while supporting their mobility and business requirements. The agreement also provides an opportunity for the Bank to expand its leasing portfolio and strengthen its presence in Sri Lanka’s vehicle financing market.
Ideal Motors is the authorised dealer for the Mahindra vehicle range in Sri Lanka, including the Mahindra Bolero CPU Truck and Scorpio Jeep/Pickup. The vehicles cater to a range of requirements, from commercial and business applications to personal mobility, making accessible financing an important part of the purchasing decision.
The Bank’s vehicle leasing facilities are designed to simplify the financing process, with convenient repayment options and professional support to help customers select a solution suited to their requirements. For customers, the arrangement brings vehicle selection and financing closer together, reducing the need to navigate the two processes separately.
“Our partnership with Ideal Motors enables us to bring financing closer to customers at the point of vehicle purchase. We remain focused on providing convenient and flexible leasing solutions that support both personal mobility and the needs of businesses,” said Naleen Edirisinghe, Director/CEO of Pan Asia Bank.
Pan Asia Bank and Ideal Motors will work closely during the one-year partnership to maximise business opportunities and deliver a seamless financing experience to customers. The collaboration is expected to strengthen both organisations’ ability to respond to demand for commercial and personal vehicles while creating greater value for customers.
Yohan Ebell, Head of Retail Credit, Pan Asia Bank, said: “Through this partnership, we aim to make vehicle financing simpler and more accessible, with leasing solutions designed to meet the varied requirements of Ideal Motors’ customers.”
The collaboration also reflects Pan Asia Bank’s commitment to building partnerships that make financial services more accessible and responsive to the needs of individuals and businesses.
Pan Asia Bank has established a growing presence in vehicle financing, offering leasing solutions designed around customer convenience and flexibility. Its leasing proposition is supported by a nationwide branch network and a customer-focused approach, enabling customers to obtain guidance on financing options while completing their vehicle purchase.
Business
Heritance Hotels and Resorts secures four wins at World Travel Awards 2026
Heritance Hotels and Resorts has secured four distinguished titles at the World Travel Awards 2026, with three national awards recognising its Sri Lankan properties and an international title for Heritance Aarah in the Maldives.
The three Sri Lankan titles recognise Heritance Tea Factory as Sri Lanka’s Leading Heritage Hotel 2026, Heritance Ahungalla as Sri Lanka’s Leading Luxury Hotel 2026, and Heritance Kandalama as Sri Lanka’s Leading Wedding Hotel 2026. Heritance Aarah was named the Indian Ocean’s Leading All-Inclusive Resort 2026.
Internationally recognised within the global travel and tourism industry, the World Travel Awards celebrate excellence across hotels, resorts, and destinations. Recognition at this level affirms the quality, distinctiveness, and consistency of the experiences delivered by Heritance Hotels and Resorts.
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