Business
Earnings from exports increase, import expenditure declines

Earnings from exports increased by 6.0 per cent (year-on-year) to US dollars 12,026 mn during the eleven months ending November 2022 as a result of increased earnings mainly from exports of textiles and garments (11.6%), gems, diamonds and jewellery (58.8%), machinery and mechanical appliances(15.9%), petroleum products (13.9%) and minor agricultural products (23.1%).
This was stated in the latest Weekly Economic Indicators report of the Central Bank of Sri Lanka.
“Import expenditure declined by 8.3 per cent (year-on-year) to US dollars 16,865 mn during this period, mainly due to lower imports of machinery and equipment (-26.5%), base metals (-54.4%), telecommunication devices (-81.9%) and medical and pharmaceuticals (-36.9%). Accordingly, the deficit in the trade account narrowed to US dollars 4,839 mn during January-November 2022 from US dollars 7,054 mn in the corresponding period of 2021,” it stated.
It further noted:
The export unit value index increased slightly by 0.4 per cent, (year-on-year), in November 2022 due to higher prices registered in industrial and agricultural categories of exports. The import unit value index in November 2022 increased by 5.9 per cent, (year-on-year), mainly due to higher prices recorded in intermediate goods. Accordingly, the terms of trade deteriorated by 5.3 per cent, (year-on-year), to 88.9 index points in November 2022.
The Unemployment rate increased to 5.0 per cent in Q3 2022 from 4.6 per cent in Q2 2022. The Labour Force Participation Rate decreased to 49.0 per cent in Q3 2022 from 50.1 per cent recorded in Q2 2022.
IIP in November 2022 decreased by 23.9 per cent to 81.2 compared to November 2021. Among the major sub divisions of the manufacturing industries, “Coke and refined petroleum products” (94.9%) and “Chemicals and chemical products” (35.0%) have mainly contributed to this overall decrease.
During the period under review (07.01.2023 to 13.01.2023) crude oil prices increased mainly attributing to expectations for less aggressive US rate hikes along with the optimism over plausible demand recovery with the opening of China’s borders and improved global economic outlook. Overall, during the period under review, Brent and WTI prices increased by US dollars 4.71 per barrel and US dollars 4.13 per barrel, respectively.
Weekly AWPR for the week ending 13th January 2023 declined by 14 bps to 27.93 per cent compared to the previous week. Broad money (M2b) expanded by 15.3 per cent, on a year-on-year basis, in November 2022. Net Credit to the Government from the banking system increased by Rs. 114.2 bn in November 2022. Outstanding credit to public corporations declined by Rs. 17.4 bn in November 2022. Outstanding credit extended to the private sector declined by Rs. 30.9 bn in November 2022.
The reserve money decreased compared to the previous week mainly due to decrease in the deposits held by the commercial banks with the Central Bank.The total outstanding market liquidity was a deficit of Rs. 332.962 bn by the end of this week, compared to a deficit of Rs. 321.191 bn by the end of last week.
By 13th January 2023, the All Share Price Index (ASPI) decreased by 1.92 per cent to 8,262.58 points and the S&P SL 20 Index decreased by 3.25 per cent to 2,528.08 points, compared to the index values of last week.
During the ten months ending October 2022, government revenue and grants increased to Rs. 1,588.3 bn compared to Rs. 1,156.5 bn recorded in the corresponding period of 2021.
During the period from January to October 2022, total expenditure and net lending increased to Rs. 3,235.0 bn compared to Rs. 2,731.7 bn recorded in the corresponding period of 2021.
During the ten months ending October 2022, overall budget deficit increased to Rs. 1,646.7 bn compared to Rs. 1,575.2 bn recorded in the corresponding period of 2021.
During the ten months ending October 2022, domestic financing decreased to Rs. 1,619.4 bn compared to Rs. 1,717.4 bn in the corresponding period of 2021. Foreign financing recorded a net borrowing of Rs. 27.3 bn during the period from January to October 2022, compared to the net repayment of Rs. 142.2 bn recorded in the corresponding period of 2021.
Outstanding central government debt increased to Rs. 25,210.7 bn by end October 2022 from Rs. 17,589.4 bn as at end 2021. By end October 2022, total outstanding domestic debt amounted to Rs. 13,596.9 bn while the rupee value of total outstanding foreign debt amounted to Rs. 11,613.8 bn.During the year up to 13th January 2023, the Sri Lankan rupee appreciated against the US dollar by 0.2 per cent. Given the cross currency exchange rate movements, the Sri Lankan rupee depreciated against the Euro by 1.5 per cent, the pound sterling by 1.0 per cent, the Indian rupee by 1.8 per cent and the Japanese yen by 2.4 per cent during this period.The average price of tea in the Colombo auction increased to US dollars 3.84 per kg in November 2022 from US dollars 3.10 per kg in November 2021.
Business
Dialog delivers strong FY 2024 performance with 10% Core Revenue Growth

Dialog Axiata PLC announced, Friday 14th February 2025, its consolidated financial results for the year ended 31st December 2024. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).
The Group delivered a strong performance across Mobile, Fixed Line, Digital Pay Television and Teleinfrastructure businesses recording a positive core Revenue growth of 10% Year to Date (“YTD”). Group Headline Revenue reached Rs171.2Bn down 9% mainly resulting from a conscious scaling down of low margin international wholesale business amounting to Rs24.3Bn. The Q4 2024 Revenue was recorded at Rs45.8Bn up 7% Quarter-on-Quarter (“QoQ”) and 6% Year-on-Year (“YoY”). The Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) reached Rs66.3Bn up 8% YTD supported by Core Revenue performance and Cost Rescaling Initiatives. On a QoQ basis Group EBITDA demonstrated a strong growth to record at Rs21.2Bn up 18% QoQ with an EBITDA margin of 46.3% as Cost Rescaling Initiatives yielded positive results. Group EBITDA margin reached 38.7% for FY 2024, up 5.4pp.
Group Net Profit After Tax (“NPAT”) reached Rs12.4Bn for FY 2024 down 38% YTD mainly resulting from significant forex gains recorded in prior year. Normalized for forex impact, NPAT decline was limited to 12% YTD to recorded at Rs8.7Bn, due to dilution from Airtel (Rs2.2Bn) and higher taxation (Rs1.1Bn). On a QoQ basis NPAT grew 51% to reach Rs6.8Bn resulting from strong EBITDA performance and lower finance cost.
Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs47.3Bn to the Government of Sri Lanka (GoSL) during FY 2024. Total remittances included Direct Taxes and Levies amounting to Rs10.6Bn and Rs36.7Bn in Consumption Taxes collected on behalf of the GoSL.
In line with the dividend policy and financial performance of the Group and taking into account the forward investment requirements to serve the nation’s demand for Broadband and Digital services, the Board of Directors of Dialog Axiata PLC at its meeting held on 14th February 2025, resolved to propose for consideration by the Shareholders of the Company, a dividend to ordinary shareholders amounting to Rs1.00 per share. The said dividend, if approved by shareholders, would translate to a Dividend Yield of 8.5% based on share closing price for FY 2024. The dividend so proposed will be considered for approval by the shareholders at the Annual General Meeting (AGM) of the Company, the date pertaining to which would be notified in due course.
Business
Govt to establish a Development Bank within existing state banking framework

Rs. 1,000mn fund for commercialization of research and innovation
By Sanath Nanayakkare
Presenting the inaugural budget of the new NPP government, President Anura Kumara Dissanayake announced yesterday the establishment of a new Development Bank aimed at supporting SMEs and new entrepreneurs. This initiative will provide them with access to funding without the need for collateral-based lending from commercial banks.
“The development of small and medium-scale enterprises (SMEs) and entrepreneurship is a key objective of the government. One of the biggest challenges faced by small and medium-scale entrepreneurs and rural entrepreneurs over a long period is access to finance. The primary obstacle to accessing finance is the collateral-based lending culture, which has hindered a significant portion of entrepreneurs from obtaining the necessary funds. Banks must protect the interests of their depositors and ensure the rationality of their lending practices, while also providing solutions for small and medium-scale entrepreneurs and new entrepreneurs,” he said.
“To address this, the government is working towards establishing a development bank. As a first step, the operations of the Development Bank will be established through a new administrative structure within the existing state banking framework. The government will support this initiative through the National Credit Guarantee Institution (NCGI), which will provide credit guarantees to facilitate access to finance,” he noted.
Speaking about innovation and entrepreneurship development the President said,” Research institutions, universities, state institutions, the private sector, and the National Intellectual Property Organization (NIPO) are collaborating with various stakeholders to implement research and development projects that address the needs of innovation and entrepreneurship. Priority will be given to the following areas:
“Co-financing for selected research and development initiatives.
“Strengthening linkages between state research and development institutions, relevant universities, and Sri Lankans engaged in similar fields globally.
“Facilitating exporters to obtain international brand protection through the Madrid Protocol.
“In 2020, 272 patents were registered, of which 223 were by non-residents. In 2019, Sri Lanka was ranked 61st in terms of patent applications. We observe that several research initiatives have been commercialized, contributing to public welfare and creating investment opportunities. Therefore, a strong institutional mechanism is needed to mainstream research with commercial potential. To this end, we propose allocating Rs. 1,000 million to establish a fund for the commercialisation of research and innovation.”
Business
CBSL reaffirms commitment to economic recovery

By Ifham Nizam
The Central Bank of Sri Lanka (CBSL) has reaffirmed its commitment to stabilizing inflation and supporting economic recovery through a carefully calibrated monetary policy stance. The February 2025 Monetary Policy Report (MPR) outlines key trends in inflation, interest rates and economic growth, offering insights into the nation’s financial future.
To enhance awareness on the report, the Bank hosted two discussions chaired by Assistant Governor Dr. Chandranath Amarasekere, with expert insights from the Director of the Economic Research Department, Directors of the Monetary Policy Committee and technical teams of the Economic Research Department.
The CBSL maintained its accommodative monetary policy throughout 2024, with a notable rate cut in November when it introduced a single policy rate mechanism—the Overnight Policy Rate (OPR)—set at 8.00%. This move effectively reduced interest rates by 50 basis points, a decision aimed at spurring economic activity while keeping inflation in check.
The monetary easing strategy aligns with the CBSL’s broader objective of anchoring inflation expectations, enhancing transparency and fostering financial market stability. As of January 2025, the OPR remains at 8.00%, signaling the bank’s confidence in its current approach.
Sri Lanka experienced deflation in the second half of 2024, driven largely by reduced electricity tariffs, lower fuel prices, and declining food costs. Since September 2024, headline inflation has remained in negative territory, reflecting a sharp drop in consumer price levels.
Looking ahead, the CBSL projects inflation to stabilize around 5% over the medium term. However, short-term risks remain. Inflation may temporarily exceed the target between late 2025 and mid-2026 before normalizing.
The report highlights several key risks to inflation:
Upside risks: Rising global food and energy prices, potential currency depreciation and unpredictable fiscal policies could push inflation higher.
Downside risks: Further price reductions in essential goods and energy could extend the deflationary trend.
The Sri Lankan economy is on a recovery path, albeit at a moderate pace. The CBSL acknowledges that the economy is operating below full capacity, with growth dependent on policy measures and external factors.
Key risks to growth include:
Labour shortages due to brain drain
Uncertain global economic conditions
Impact of climate change on agriculture
Conversely, debt restructuring and tourism recovery could provide much-needed economic momentum.
Despite statistical evidence of falling prices, many Sri Lankans do not feel a significant improvement in their cost of living. The report suggests this disconnect stems from:
Past inflation episodes, which have left prices elevated despite recent declines.
Income levels lagging behind inflation trends, reducing purchasing power.
Psychological and behavioral factors, where consumers may not perceive small price reductions as meaningful relief.
The CBSL’s focus remains on managing inflation expectations, ensuring financial stability, and supporting economic growth. While the current outlook suggests a gradual recovery, external shocks and domestic challenges could still pose risks.
As Sri Lanka navigates its economic future, policy consistency, fiscal discipline, and structural reforms will be critical in achieving long-term stability.
With inflation stabilizing and monetary policy remaining accommodative, the CBSL appears confident in its strategy. However, whether these measures translate into real economic relief for the public remains to be seen.
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