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WB: Lankan economy shows remarkable recovery in 2024
Sri Lanka’s economy has made a remarkable recovery in 2024, surpassing growth expectations by recording 5 percent growth, compared to the projected 4.4 percent, says the World Bank. This growth has been driven by strong performances in industry and services, particularly in construction and tourism-related services.
According to the report in 2025, growth is expected to moderate to 3.5 percent reflecting scarring effects of the crisis and structural impediments to growth, amid global headwinds and unprecedented trade policy uncertainty.
Released on Wednesday (23), the World Bank’s bi-annual Sri Lanka Development Update, titled Staying on Track, highlights that despite the positive growth and fiscal performance, significant challenges remain. While the economy is recovering, many Sri Lankans are still struggling. Household incomes, employment, and overall welfare are still well below pre-crisis levels, and the poverty rate remained alarmingly high at 24.5 percent in 2024 according to the report. The labor market continues to struggle, leading to increased emigration as people look for opportunities abroad.
“While Sri Lanka’s economy is bouncing back stronger than expected, a significant portion of the population—about a third—remains in poverty or is at risk of falling back into poverty,” said David Sislen, World Bank Division Director for Maldives, Nepal, and Sri Lanka. “To ensure this recovery works for everyone, especially those who have been hit hardest, Sri Lanka can focus on policies that create jobs and support the poor.”
The report underscores that medium-term growth and poverty reduction depend on maintaining macroeconomic stability and implementing key structural reforms amid an increasingly uncertain global environment. The World Bank forecasts moderate growth of around 3.1 percent for Sri Lanka in 2026.
Shifting to a higher growth trajectory through the successful implementation of reforms that enhance trade, investment, competition and female labor force participation, among others, is essential to ensure that all Sri Lankans benefit from the recovery. Looking ahead, the World Bank emphasizes the continued need for policy reforms to maintain macro-fiscal and financial stability, boost competitiveness, increase productivity, and expand job opportunities.
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 countries face. The April 2025 edition, Taxing Times, projects regional growth to slow to 5.8 percent in 2025—0.4 percentage points below October projections—before ticking up to 6.1 percent in 2026.
This outlook is subject to heightened risks, including from a highly uncertain global landscape, combined with domestic vulnerabilities including constrained fiscal space. It includes a special chapter analyzing the state of domestic resource mobilization in the region. Despite often higher tax rates, the region’s tax revenues remain below the average for emerging markets and developing economies. The report outlines how countries can address inefficiencies in tax policy and administration to increase revenues so they can enhance resilience amid an increasingly challenging global economic environment.
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Parliament: Govt. questioned on returned cheques, delayed payments for disaster victims
Returned cheques, delayed payments and unresolved insurance claims dominated Parliament on Tuesday as National Democratic Front (NDF) MP Ravi Karunanayake asked the government to make statement on compensation and restoration following Cyclone Ditwah.
Raising the matter under Standing Order 27(2), Karunanayake said thousands of citizens, affected by the 28 November, 2025 cyclone, were still waiting for relief, despite a presidential directive that all compensation and restoration work be completed by 31 December, 2025.
Karunanayake told the House that affected communities were reporting “crippling delays, non-payment, returned cheques and unresolved insurance claims,” warning that the situation had left tens of thousands displaced more than a month after the deadline. “These delays raise grave concerns about transparency, administrative capacity and accountability,” he said.
Cyclone Ditwah caused widespread destruction across several districts, claiming lives and damaging homes, infrastructure, agriculture, fisheries and small and medium-sized enterprises. Karunanayake said reports indicated that around 48,000 people were still unable to return to their homes, underscoring the scale of the humanitarian and economic impact.
Full text of Karunayake’s statement: I rise under Standing Order 27(2) for an urgent Government statement on compensation and restoration after Cyclone Ditwah of 28 November 2025, which caused severe loss of life, destruction, and widespread damage. Despite a Presidential directive for completion by 31 December 2025, affected citizens report crippling delays, non-payment, returned cheques, and unresolved insurance claims. Reports suggest tens of thousands remain displaced, raising grave concerns.
For transparency, I seek clarification on:
1. Has the Disaster Management Centre formally approved a consolidated national loss and damage assessment? What is the total estimated loss and approval date?
2. What is the total restoration cost, disaggregated by housing, infrastructure, agriculture, fisheries and SMEs?
3. What is the total affected population? Provide a district-wise breakdown of casualties, displaced families, and destroyed/damaged houses. Is it correct that 48,000 persons cannot return home?
4. What compensation categories, eligibility criteria, and payment rates were approved for households, the deceased, farmers, SMEs, and others and under what authority?
5. As of 31 December 2025 and now, how many payments and total amounts have been disbursed for each band (e.g., Rs. 25,000; Rs. 50,000; Rs.1Mn for deceased; housing bands up to Rs. 10Mn), plus farmer and SME payments, by district?
6. How many eligible beneficiaries remain unpaid, by category and district and what are the principal causes (verification, documentation, banking, funding)?
7. Why have compensation Cheques been returned, how many cases exist and what remedial measures are in place?
8. What steps ensure Insurance Companies settle claims? How many claims and what value remain unpaid?
9. What donor funds (grants, loans, aid) have been received? How much has been spent on compensation vs. infrastructure and when will the International donor conference be held?
I request the Government table its response with annexed district-wise tables on assessments, allocations, disbursements, returned cheques, insurance status and unpaid balances.”
Deputy Defence Minister Major General (retd) Aruna Jayasekara said that the government needs two weeks to respond to the queries raised by MP Karunanayake.
by Saman Indrajith
News
President urges shedding of petty differences to achieve an economically strong Sri Lanka
President Anura Kumara Dissanayake yesterday called for unity, beyond petty differences, to build an economically strong Sri Lanka, declaring that the country’s greatest asset was its human resource and warning that there would be no place for racism or extremism in the nation’s future.
Addressing the 78th National Independence Day celebrations, at Independence Square, in Colombo, the President said Sri Lanka must embark on a path of rebuilding, rooted in its sovereignty, history and values, while embracing reform and progress. The national celebrations, held under the theme, ‘Rebuilding Sri Lanka’, commenced at around 7.30 a.m., paying tribute to those who sacrificed much to secure independence from British rule in 1948.
More than 4,500 personnel from the tri-forces and Police took part in the ceremony, alongside around 400 invited guests, including foreign diplomats. A special security and traffic management plan was also in effect, with over 2,000 Police officers deployed across Colombo to ensure public safety and smooth traffic flow.
In his address to the nation, President Dissanayake paid tribute to past generations who fought for the countrys freedom, describing them as heroic patriots whose sacrifices formed the foundation of the nation.
The land on which we stand today is drenched with the blood and tears of our ancestors, he said, adding that it was the duty of present and future generations to honour that legacy.
The President stressed that rebuilding Sri Lanka required drawing strength from the country’s proud history while rejecting harmful practices of the recent past. Economic development, he said, must not erode the foundations of the nation but instead be firmly rooted in the soul of the land and its people.
Emphasising the importance of human capital, the President said Sri Lanka must transform its human resources into a competitive force capable of standing alongside developed nations. He underscored the need to prioritise knowledge, unity and progress over ignorance, prejudice and division, and announced that the Government was ready to implement the most far-reaching education reforms in the country’s history to achieve this goal.
We are prepared to initiate a transformative era in education, he said, pledging to overcome resistance from outdated thinking, and expressing confidence that the people would support the reform process.
The President also highlighted the centrality of the rule of law, national unity and healthy international relations in rebuilding the country. True freedom, he said, could only be achieved through economic strength, supported by good governance and social cohesion.
Reaffirming his commitment to national unity, President Dissanayake said racism and extremism would not be tolerated, warning that both only weakened the nation. He called on all segments of society, including the Government, Opposition, public service and religious leaders, to unite with determination to rebuild Sri Lanka in every sphere.
News
PM: No withdrawal of modules introduced for Grade 6 under proposed education reforms
Prime Minister and Education Minister Dr Harini Amarasuriya told Parliament on Tuesday (3) that none of the modules introduced for Grade 6 under the proposed education reforms had been withdrawn.
Responding to a question by SJB Kurunegala District MP Nalin Bandara Jayamaha, the Prime Minister said the government was planning to implement reforms from 2027.
“Only the modules for the first term of Grade 6 have been printed so far. None of these modules has been rejected or withdrawn. They will be used when the reforms are implemented. No decision has been taken to discard them or to take any action that would result in a financial loss,” she said.
The PM said distribution of the printed Grade 6 textbooks, which had been stored in warehouses, had already commenced and that the government expected to complete the distribution of them by mid-February.
“The teaching process has already begun. As the existing syllabus remains in force, teachers are continuing instruction under the current curriculum,” the Prime Minister said.
MP Jayamaha said there had been controversy surrounding a particular Grade 6 module and sought clarification as to whether it would be withdrawn.
In response, the Prime Minister reiterated that no modules had been removed, due administrative action had been taken with regard to the relevant Grade 6 module and that the matter would be addressed appropriately.
By Saman Indrajith
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