Business
SL confronting ‘decisive test of fiscal discipline’
Sri Lanka enters the new year confronting a familiar but deepening economic strain, with falling foreign reserves, a weakening rupee, rising public debt and mounting disaster-related losses posing what analysts describe as a decisive test of fiscal discipline and policy coherence.
Sri Lanka Human Rights Centre Executive Director and former Provincial Governor Ranjith Keerthi Tennakoon has warned that the country urgently requires a coordinated economic response to prevent further deterioration, particularly as the cost of post-disaster reconstruction threatens to exert fresh pressure on already strained public finances.
“While the government has succeeded in revenue augmentation through heavy taxation and repeated increases in electricity and gas tariffs, its performance in maintaining fiscal discipline remains weak,” Tennakoon said in an economic indicators statement issued on January 5.
According to figures cited by Tennakoon, Sri Lanka’s domestic debt stood at Rs. 17,595.05 billion when President Anura Kumara Dissanayake assumed office. By the end of September 2025, that figure had climbed to Rs. 18,701.46 billion, reflecting an increase of Rs. 1,106.41 billion within a year.
External debt has also trended upward. From Rs. 10,429.04 billion at the end of 2024, foreign debt rose to Rs. 10,974.34 billion by September 2025. As a result, Sri Lanka’s total public debt stock now stands at Rs. 29,675.81 billion, underscoring the scale of the country’s fiscal exposure.
“This trajectory raises serious concerns about long-term debt sustainability,” Tennakoon warned, noting that debt servicing costs will intensify further if currency depreciation continues.
Foreign reserves under pressure
The steady decline in foreign reserves remains one of the most critical challenges facing the economy. Gross official reserves fell from USD 6,531 million in March 2025 to USD 6,033 million by the end of November, a contraction of nearly USD 500 million.
Tennakoon cautioned that upcoming reconstruction needs following widespread floods and landslides will necessitate substantial imports of construction materials, machinery and industrial inputs, inevitably drawing down scarce foreign exchange reserves.
Although Sri Lanka managed to maintain a current account surplus in 2024, the balance slipped back into deficit during September and October 2025, before returning to surplus in November. While a surplus is not required at all times, Tennakoon said the November turnaround offered a “cautious but positive signal” regarding the economy’s direction.
The rupee’s depreciation continues to amplify macroeconomic risks. The exchange rate has weakened from Rs. 293.25 per US dollar last year to around Rs. 309.45, increasing the rupee cost of foreign debt servicing while driving up import and production costs.
More troubling, Tennakoon noted, is the widening gap between commercial bank exchange rates and the informal undiyal (black market) rate, reflecting growing uncertainty and eroding confidence.
“This was precisely how the 2021–2022 economic crisis began — with a widening divergence between official and informal exchange rates,” he warned.
The economic fallout from recent floods and landslides adds another layer of urgency. Tennakoon criticised the government for failing, thus far, to prepare a comprehensive estimate of financial losses and reconstruction costs.
Preliminary assessments by the World Bank estimate disaster-related losses at USD 4 billion, while the International Labour Organization (ILO) places the figure as high as USD 16 billion, equivalent to 16 percent of GDP.
“Massive tax resources will be required for relief payments, while reconstruction will demand substantial foreign exchange for imports,” Tennakoon said, stressing that the government must urgently prepare credible financial assessments to mobilise both domestic and international support.
He also warned that delays in providing adequate relief have already become a serious concern for displaced communities struggling to rebuild their lives.
By Ifham Nizam
Business
JAT Holdings celebrates the 6th Pintharu Abhiman Convocation, uplifting over 800 painters through NVQ certification
JAT Holdings PLC marked a significant milestone with the successful conclusion of the 6th JAT Pintharu Abhiman Convocation, recognising more than 800 painters who have earned their NVQ Level 3 qualification, an internationally recognised professional certification delivered in partnership with the National Apprentice and Industrial Training Authority (NAITA).
JAT Pintharu Abhiman was established to uplift Sri Lanka’s painter community through structured skills development, professional recognition and stronger earning potential. This year’s graduating cohort reflects the programme’s expanding reach and the tangible changes it continues to deliver for individuals, families and communities.JAT in collaboration with NAITA has streamlined the certification process such that what would traditionally take up to six months has been refined into an efficient and high-impact three-day assessment model. This approach ensures painters can obtain their qualification without sacrificing extended periods of work, while JAT fully absorbs the certification cost, removing financial barriers and enabling wider access to formal recognition.
Research conducted amongst NVQ qualified participants shows meaningful improvements in livelihoods, with 90 percent reporting increased personal confidence and 76 percent noting an improvement in their overall standard of living. This uplift demonstrates the long-term value of industry-aligned professional training.
A noteworthy moment at this year’s convocation was the recognition of four female painters who received their NVQ certifications. Their achievement marks an important step in broadening female participation in a field that has historically been male dominated, reinforcing JAT Holdings’ commitment to creating inclusive pathways for technical development and sustainable employment.
Speaking at the ceremony, Mr. Wasantha Gunaratne, Director Sales and Technical (South Asia) of JAT Holdings PLC, said:
“Pintharu Abhiman is fundamentally about development, giving painters the knowledge, structure and recognition they need to progress in their careers. By equipping over 800 painters with an internationally recognised NVQ qualification, we are not only strengthening the technical standards of the industry but also creating real pathways for entrepreneurship and financial independence. It is especially encouraging to see that one in five certified painters have already begun building their own businesses. These are the outcomes that matter because they show that when we invest in skills, we unlock opportunity. JAT remains committed to expanding these avenues so every painter has the chance to grow, lead and build a sustainable future.”
The 6th JAT Pintharu Abhiman Convocation underscores JAT’s continued dedication to uplifting the painter community, enhancing industry standards and supporting national skills development through accessible, professionally recognised qualifications.
Business
Industry bodies flag gaps in Draft National Electricity Policy
The Ceylon Chamber of Commerce, together with the American Chamber of Commerce, Exporters Association of Sri Lanka, Federation of Renewable Energy Developers, Joint Apparel Association Forum, National Chamber of Commerce of Sri Lanka and Sri Lanka Association for Software and Services Companies, has submitted joint observations on the Draft National Electricity Policy, highlighting that several key issues have not been adequately addressed.
Whilst recognizing the need for reform in the electricity sector, the submission flags several gaps in the draft policy that require closer attention. Key areas such as affordability, decarbonisation commitments, incentives for renewable energy, competition, and the long-term financial health of the sector are either missing or not addressed in sufficient depth.
The proposed tariff revisions outlined in the draft energy policy raise concerns, particularly regarding the removal of cross-subsidies and the proposal to restrict subsidies exclusively to households consuming less than 30 kWh per month. Without detailed analysis, these measures could weaken access to sustainable and affordable energy and potentially lead to fiscal risks.
The provisions allowing uncompensated curtailment, removing feed-in tariffs, and imposing mandatory time-of-use tariffs on rooftop solar users could make renewable energy projects un-bankable for international lenders, thereby increasing the cost of capital for Sri Lanka.
Calling for a more future-focused approach, the submission stresses the need for a policy that reflects modern electricity systems, including planning for the energy transition, energy storage, market competition, cross-border electricity trading, and emerging technologies.
The Chambers and Associations request a comprehensive revision of the Draft National Electricity Policy, alignment with the Electricity Act, and resubmission following substantive consultation, and reiterate support to engage constructively with policymakers to shape a policy that supports affordability, investment confidence, and Sri Lanka’s long-term energy security.
Business
Bank of Ceylon partners with 36th APB Sri Lanka Convention
Bank of Ceylon (BOC) partnered with the 36th Annual Convention of the Association of Professional Bankers (APB) Sri Lanka, reaffirming its commitment to promoting professional excellence and knowledge sharing within the banking sector. The partnership was officially handed over by Sameera D. Liyanage, Chief Marketing Officer of Bank of Ceylon and M. R. N. Rohana Kumara, Deputy General Manager Business Revival Unit of Bank of Ceylon, reflecting BOC’s focus on empowering banking professionals and supporting the sustainable growth of Sri Lanka’s financial services industry.
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