Business
Sri Lanka’s economy shows signs of stabilization, but poverty to remain elevated
Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilization, following the severe economic downturn of 2022. But, the country still faces elevated poverty levels, income inequality, and labor market concerns, says the World Bank’s latest bi-annual update.
The Sri Lanka Development Update, Bridge to Recovery, highlights that Sri Lanka saw declining inflation, higher revenues on the back of the implementation of new fiscal policies, and a current account surplus for the first time in nearly five decades, buoyed by increased remittances and a rebound in tourism.
However, poverty rates continued to rise for the fourth year in a row, with an estimated 25.9% of Sri Lankans living below the poverty line in 2023. Labor force participation has also seen a decline, particularly among women and in urban areas, exacerbated by the closure of micro, small, and medium-sized enterprises (MSMEs). Households are grappling with multiple pressures from high prices, income losses, and under employment. This has led to households taking on debt to meet food requirements and maintain spending on health and education.
“Sri Lanka’s economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms,” emphasized Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka. “This involves a two-pronged strategy: first, to maintain reforms that contribute to macroeconomic stability and second, to accelerate reforms to stimulate private investment and capital inflows, which are crucial for economic growth and poverty reduction.”

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD
Looking forward, the report projects a modest pickup in growth of 2.5% in 2025, with a gradual increase in inflation and a small current account surplus. However, high debt service obligations are expected to exert pressure on fiscal balances. Poverty rates are anticipated to remain above 22% until 2026. Risks to the outlook remain, particularly related to inadequate debt restructuring, reversal of reforms, financial sector vulnerabilities, and the enduring impact of the crisis. The report emphasizes that strong reform implementation will be fundamental to fostering a resilient economy through continued macro-fiscal-financial stability, greater private sector investment, and addressing risks associated with state-owned enterprises.
The Sri Lanka Development Update is a companion piece to the South Asia Development Update, a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges faced by countries. The April 2024 edition, Jobs for Resilience, projects South Asia to remain the fastest-growing region in the world, with growth projected to be 6.0% in 2024- driven mainly by robust growth in India and recoveries in Pakistan and Sri Lanka. But this strong outlook is deceptive, says the report. For most countries, growth is still below pre-pandemic levels and is reliant on public spending. At the same time, private investment growth has slowed sharply in all South Asian countries and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population. The report recommends a range of policies to spur firm growth and boost employment as well as help lift growth and productivity and free up space for public investments in climate adaptation.
Business
Hour of reckoning comes for SL’s power sector
By Ifham Nizam
A long-delayed reckoning in Sri Lanka’s power sector is finally beginning to take shape—driven less by choice and more by necessity.
At a time when the country’s fragile economic recovery hinges on stability, the electricity sector—long plagued by inefficiency, political interference, and costly dependence on imported fuel—has re-emerged as both a risk and an opportunity.
It is within this context that The Institution of Engineers, Sri Lanka will host a timely and potentially consequential forum on April 2 at the Wimalasurendra Auditorium, focusing on a “Pragmatic Approach to Electricity Sector Reforms in Sri Lanka and the Way Forward.”
This is not just another technical discussion. It is, in many respects, a reality check.
The keynote address by Eng. Pubudu Niroshan—who stood at the centre of recent reform efforts as Director General of the Power Sector Reforms Secretariat—comes at a moment when the gap between policy ambition and execution has become impossible to ignore.
For over three decades, Sri Lanka has spoken the language of reform. Yet, time and again, progress has been derailed by institutional resistance, political hesitation, and an entrenched reluctance to dismantle inefficient structures.
The result is a sector that continues to bleed financially while passing the burden onto consumers and the broader economy.
High electricity tariffs, supply vulnerabilities, and operational inefficiencies are no longer isolated technical issues—they are macroeconomic threats. Industries struggle to remain competitive, investors remain cautious, and households continue to bear rising costs. The over-reliance on imported fossil fuels has only deepened this vulnerability, exposing the country to global price shocks and geopolitical disruptions.
The economic crisis of 2022 briefly forced a shift in thinking. Under severe fiscal pressure, reform was no longer optional. The passage of the Sri Lanka Electricity Act, No. 36 of 2024 was seen as a breakthrough—an acknowledgment that structural change could no longer be postponed.
But legislation alone does not transform systems.
What has followed is a more grounded, outcome-driven approach—one that attempts to move beyond policy rhetoric. Within a relatively short span, the first phase of restructuring has been pushed through, including the repeal of the decades-old CEB Act, No. 17 of 1969, and the unbundling of the monolithic utility into six state-owned entities.
This is, by any measure, a significant structural shift.
Yet, the real test lies ahead.
Unbundling without genuine market discipline risks becoming another cosmetic exercise.
The promise of a competitive National Electricity Market—long discussed but never realized—will depend heavily on regulatory strength, transparency, and political consistency. Without these, the same inefficiencies could simply be replicated across multiple entities.
Moreover, reform cannot succeed in isolation.
Sri Lanka’s energy transition must be anchored in a broader economic strategy—one that aligns power sector reforms with industrial growth, environmental sustainability, and investment policy.
The proposed “Energy Transition Act,” now under consideration, will be a critical piece of this puzzle. If executed with clarity and discipline, it could provide the legal backbone for a coherent and forward-looking energy framework.
The reference to an Integrated Economic Development Framework (IEDF) in the 2026 Budget underscores this necessity. Energy is not a standalone sector—it is the foundation upon which economic recovery will either stand or falter.
What makes this moment different is the absence of alternatives.
Sri Lanka can no longer afford half-measures or delayed decisions. The cost of inaction is too high, and the margin for error too narrow. Reform, in this sense, is no longer a policy preference—it is an economic imperative.
The upcoming forum at The Institution of Engineers, Sri Lanka is therefore more than a professEng. Pubudu Niroshanional gathering. It is a critical platform where technical expertise must confront political reality, and where long-standing assumptions must be challenged.
For years, Sri Lanka’s electricity sector has been caught in a cycle of discussion without delivery. The shift toward a pragmatic approach signals an understanding that outcomes—not intentions—will define success.
The question now is whether that realization will finally translate into sustained, irreversible change.
Because this time, failure is not just an option—it is a risk the country simply cannot afford.
Business
Dialog introduces Samsung Galaxy S26 Series with AI-powered camera and 5G Connectivity
Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider, announced the availability of the Samsung Galaxy S26 Series in Sri Lanka through its retail and digital channels, bringing Samsung’s latest flagship smartphone lineup to local consumers. The series includes the Galaxy S26, Galaxy S26+, and Galaxy S26 Ultra, combining advanced AI-powered capabilities, premium design and next-generation connectivity for everyday mobile use, with customers able to experience the power of Dialog 5G Ultra on the devices.
The Samsung Galaxy S26 Series introduces an AI-powered camera system featuring a 200MP AI-enhanced rear camera with improved low-light performance, advanced zoom and intelligent editing tools for capturing and refining content directly on the device. The lineup also includes Galaxy AI capabilities, a privacy display that limits viewing angles to protect on-screen information, and steady video functionality for smoother and more stable video recording.
The Galaxy S26 Series features Dynamic AMOLED displays across the lineup, including a 6.3-inch Galaxy S26, 6.7-inch Galaxy S26+, and 6.9-inch Galaxy S26 Ultra, supporting smooth performance for streaming, gaming and everyday productivity. The devices are available with 12GB RAM and storage options of 256GB or 512GB, while the Galaxy S26 Ultra also offers a 16GB RAM variant with up to 1TB storage for users requiring additional capacity.
Business
Ideal Motors celebrates gala ‘Excellence Awards’ honouring outstanding performance
The Mahindra Ideal Excellence Awards ceremony, a grand celebration to recognize dealers and other stakeholders of Ideal Motors, was held at the Wave n’ Lake Banquet Hall & Restaurant in Welisara recently.
The event was graced by the presence of special guests including Nalin Welgama, Founder and Chairman Ideal Motors, Dilani Yatawaka, Group Managing Director/CEO Ideal Motors, Nimisha Welgama, Director Legal and Corporate Affairs Ideal Motors, Sachin Arolkar, Head International Operations, Auto Division Mahindra & Mahindra India. Senthil Selvaraju, Head International Operations and Customer Service Automotive Division Mahindra & Mahindra India, Sujeeth Jayant, Country Head Mahindra & Mahindra India and Shitam Kundu, Head Domestic Services Mahindra & Mahindra India.
Also, in attendance from Ideal Motors were Kasun Fernando, General Manager Commercial Vehicle Sales Division, Sameera Bamunuarachchi, Deputy General Manager Spare Parts, Logistics & Inventory and Prasanna Manamperi, Deputy General Manager After Seles Service.
The Excellence Awards ceremony honoured the top sales dealers at the provincial and national levels. Recipients were presented with awards, certificates of merit, and cash prizes in recognition of their achievements. The three best national‑level sales dealers from the various categories were further rewarded with an opportunity to visit Bangkok, Thailand. In addition, special recognition was extended to banks and financial institutions that partner with Ideal Motors.
Speaking at the event, Nalin Welgama Ideal Motors Founder and Chairman said, “When we began our journey with Mahindra in 2009, the previous company had sold 300 vehicles in the country, of which nearly 150 had various defects. At that time our journey began by engaging with the parent company in India and repairing those vehicles free of charge. That commitment has brought us to where we are today. As we believe, our journey truly begins after the sale. We are dedicated to strengthening our customers, and in doing so, strengthening ourselves. That is how we transformed the after‑sales service experience.”
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