Business
CB chief sees negative fallouts from IMF deal
ECONOMYNEXT – Central Bank governor Nivard Cabraal said seeking International Monetary Fund (IMF) help to resolve a debt and forex crisis would lead to currency depreciation and sharply higher interest rates, trimming the public sector and privatization of state enterprises.
However several policy corrections, which are usually in IMF deals are already done, he said.
Sri Lanka has been downgraded to CCC by rating agencies indicating higher risk of default as the country printed money to keep rates in a “monetary stimulus” on top of “fiscal stimulus” and lost foreign reserves as the printed money was exchanged for dollar reserves to maintain the exchange rate.
Ministers of President Gotabaya Rajapaksa’s ruling SLPP coalition has discussed the possibility of the government seeking IMF assistance to resolve the external crisis as it became more difficult to import oil and other goods.
The party had come to power slamming the last administration for going to the IMF, which led to tax hikes.
“If we want, there is no problem going for the IMF. We had gone in 2009. So nobody should think that we hesitate or fear to go,” Cabraal said at a news briefing on Thursday.
“The IMF could tell us to depreciate the rupee, raise the interest rates by 30 percent, 40 percent, 50 percent further, reduce the number of government sector employees, reduce or curtail pension benefits, and sell various state assets.
“These are some conditions they include in their reform agenda.
“Our view is that we do not need that reform agenda at this juncture. Our view is that without going for that, we can pay back our creditors. Though we see some pressure during this time, we know that will ease in the time ahead.”
The last IMF program failed to impose sufficient controls on the central bank giving it enough room to print money under discretionary flexible inflation targeting and triggered a second currency crisis in 2018 within the program leading to an output shock.
It also failed to impose spending controls on the Treasury ‘under so-called revenue based fiscal consolidation’ sans ‘spending based consolidation’ leading to steep rise in government spending and an increase in state sector pension entitlements.
The currency fall which usually comes a under an IMF program leads to a fall in real wages, a consumption fall, higher unemployment and an economic slowdown – the inevitable consequence of monetary and fiscal excesses – which leads to unhappy voters if elections come before growth recovers.
Cabraal, however, said Sri Lanka itself has been already doing what the IMF might prescribe in a policy package.
“The issue is we need to face the debt problem,” Cabraal said. “The main reason for the debt problem is 6.9 billion US dollars had been borrowed as loans via sovereign bonds to this country from 2018 April to 2019 June. Those loans have put a lot of pressure on the country’s debt.”
“So we have decided to do away with that kind of borrowing and reduce them while using some other borrowing methods. That is what we are doing right now. This will be the same advice the IMF will give us. No other advice they will give.”
“Debt restructuring is basically you change from one instrument to another. This has been done with a deep thought and scientific manner. Since we are already doing it, we do not need external help to do that.”
He also said the government has already taken decisions to change maximum retail prices of commodities.
“In some instances, we have removed them which could be told by the IMF.”
The budget for 2022 had already frozen recruitment raised taxes on companies including turnover based taxes and there were no salary hike for state workers except for striking teachers.
However any IMF programme now is likely to require the float of the currency as a prior action to restore foreign exchange markets.
Business
Saudi Vision 2030 offers new economic opportunities for Sri Lanka
By Ifham Nizam
Saudi Arabia’s Vision 2030 is creating opportunities for Sri Lanka in trade, investment, renewable energy, tourism and employment while strengthening the longstanding friendship between the two countries.
Led by King Salman bin Abdulaziz Al Saud and Crown Prince and Prime Minister Mohammed bin Salman, the programme aims to diversify Saudi Arabia’s economy, attract international investment, develop new industries and reduce dependence on oil revenues.
Launched in 2016, Vision 2030 is built around three pillars: a vibrant society, a thriving economy and an ambitious nation. Its focus on tourism, technology, logistics, renewable energy, industrial development and private-sector growth aligns with Sri Lanka’s need for foreign investment, stronger exports, energy security and sustainable employment.
Trade and investment opportunities
The establishment of the first Saudi–Sri Lanka Joint Business Council in November 2025 created a platform for businesses to identify investment opportunities, develop partnerships and address trade barriers. Saudi participation in Sri Lanka Expo 2027 could further strengthen commercial ties.
Sri Lanka can expand exports of value-added tea, spices, apparel, rubber products and processed foods to Saudi Arabia. Better distribution networks, packaging and compliance with market standards would help local producers, especially small and medium-sized enterprises, compete more effectively.
Saudi investors could explore Sri Lankan tourism, logistics, food processing, renewable energy and export-oriented manufacturing. The goal should be long-term partnerships that create jobs, transfer technology and improve productivity rather than simply increasing trade.
Renewable energy and green investment
Energy is another promising area. Saudi Arabia’s diversification programme includes major investments in renewable energy and emerging technologies. Partnerships in solar power, battery storage, electricity infrastructure and energy efficiency could help Sri Lanka reduce dependence on imported fossil fuels and improve energy security.
Cooperation could also include technical training and technology transfer. Saudi investment in sustainable tourism, modern agriculture, water management and infrastructure could create further opportunities if projects are commercially viable and supported by transparent regulations.
Vision 2030 seeks to make Saudi Arabia a major international tourism destination while improving services for pilgrims visiting Makkah and Madinah.
Sri Lanka could attract more Saudi visitors through better air connectivity, targeted marketing and partnerships with travel operators. Sri Lankan companies could also supply food, hospitality services and other products to Saudi Arabia’s expanding tourism sector.
Employment remains central to bilateral relations. Sri Lankan workers contribute to the Saudi economy, while their remittances provide valuable foreign exchange at home. As Saudi Arabia develops new industries, Sri Lanka can strengthen vocational training and skills-based recruitment in hospitality, healthcare, construction and technical services. Recognised qualifications, ethical recruitment and worker protection would benefit both countries.
Economic cooperation is complemented by Saudi Arabia’s distinctive spiritual role as custodian of Islam’s two holiest mosques.
Through the Custodian of the Two Holy Mosques’ Guests Programme for Hajj, Umrah and Visit, King Salman approved the hosting, at his personal expense, of 1,000 male and female Umrah performers from around the world in June 2026. Implemented by the Saudi Ministry of Islamic Affairs, Dawah and Guidance, the programme’s first group included 250 guests from 16 Asian countries, who visited Madinah and Makkah and took part in cultural and educational activities.
For those invited, performing Umrah and visiting the holy sites is a deeply meaningful religious experience. The initiative reflects Saudi Arabia’s commitment to facilitating worship and strengthening bonds among Muslim communities. It also complements Vision 2030’s Pilgrim Experience Programme, which aims to improve transport, accommodation, digital services and facilities for pilgrims.
This spiritual and cultural engagement adds a human dimension to commercial ties, helping deepen understanding between the two peoples.
Sri Lanka and Saudi Arabia established diplomatic relations in 1974, and their partnership has grown through trade, employment, development cooperation and diplomacy. The next step is to convert this goodwill into measurable results.
Sri Lanka needs a clear portfolio of viable projects, predictable regulations and efficient procedures to attract Saudi investment. Local businesses must be prepared to meet Saudi market requirements, while the Joint Business Council and Sri Lanka Expo 2027 can help connect investors and entrepreneurs.
The partnership should ultimately be judged by increased exports, productive investment, quality employment and the transfer of skills and technology.
Vision 2030 offers Sri Lanka an opportunity to build a more dynamic relationship with Saudi Arabia by combining commercial cooperation with diplomatic, spiritual and people-to-people ties. Together, the two countries can create lasting benefits for their economies and communities.
Business
LKR 3 billion HLAB fund launched to help Sri Lankan businesses scale
Hatch, Lankan Angel Network and BOV Capital join forces, with First Capital Holdings PLC committing LKR 300 million as anchor limited partner in a fund built on a commercial investment case.
Starting a business is difficult. Building one that can grow, compete and endure is harder still.
For Sri Lankan founders, the challenge doesn’t end when they prove their idea works. The next stage demands stronger operations, access to new markets and the capital to pursue opportunities that could transform a promising venture into a sustainable business.
A new initiative aims to help more founders take that next step.
Hatch, Lankan Angel Network (LAN) and BOV Capital have launched HLAB, a collective LKR 3 billion fund designed to back early and growth stage regional companies that are incorporated in Sri Lanka. Announced at the final event of First Capital Startup Nation, organised by Hatch, the initiative brings together three established participants in the country’s startup ecosystem around a shared ambition: expanding access to capital for businesses seeking to grow.
Adding institutional participation to the initiative, First Capital Holdings PLC has committed LKR 300 million as the fund’s anchor limited partner, representing 10% of its total size.
From promising startups to enduring businesses
The transition from an early stage venture to a sustainable, growing company is a defining point in a founder’s journey. Businesses must move beyond establishing their models and begin building the operational strength and market reach needed to pursue larger opportunities.
Business
JXG’s Wasanthi Stephen makes history as the first female recipient of the CIPM Sri Lanka Lifetime Gold Award
JXG (Janashakthi Group) celebrates Wasanthi Stephen, Group Chief Human Resources Officer, on becoming the first female recipient of the prestigious CIPM-Baurs Lifetime Gold Award 2026 from the Chartered Institute of Personnel Management (CIPM) Sri Lanka since the award’s inception. Presented on 14 October 2026, at the opening of the National Human Resource Conference (NHRC) 2026 at Monarch Imperial, Kotte, the award marks a historic milestone for Sri Lanka’s Human Resources profession and a proud moment for JXG.
The highest individual recognition in Sri Lanka’s Human Resource Management sphere, the CIPM Sri Lanka Lifetime Gold Award celebrates individuals whose long-standing contributions have advanced the HR profession at organisational, national, and international levels. It recognises professional excellence, ethical leadership, transformational impact, and a sustained commitment to people and institutions.
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