Business
‘Former govt.’s currency printing spree, chief among reasons for economic debacle’
By Hiran H.Senewiratne
The ousted regime’s prioritization of political expediency over the national interest coupled with their currency printing spree exercise aimed at keeping interest rates at a low level, resulted in the country’s economic woes, Central Bank Governor Dr Nandalal Weerasinghe said.
“Today the SME sector is badly hit due to high interest rates. The reasons for it is traceable to the ousted regime keeping interest rates at a low level together with heavy money printing. This resulted in the current high inflation rate in the country, Dr Weerasinghe told the media at the monthly monetary policy review meeting held at the Central Bank auditorium last week.
Dr. Weerasinghe added: ‘Steeply rising prices are a bigger threat to businesses than high interest rates which will have to be maintained for a time until inflation starts to ease.
‘Sri Lanka is now experiencing the result of past money printing and if rates are cut now, runaway inflation could be the result.
“Higher interest rates are a cost to any business, but inflation drives up all costs. Interest rates are raised by a Central Bank as an independent decision taking into account economic conditions and inflation.
“It is said that the rupee fell from Rs 200 to Rs. 360 to the US dollar in 2022 after two years of money printing to suppress rates and inflation had hit close to 70 per cent by September.
“Interest rates were kept down for a time. In the recent past enough money was printed. We are seeing the result of that.”
Meanwhile, a top economist who preferred anonymity told The Island Financial Review that ex-President Gotabhaya Rajapakse totally messed up the economy, independent of the Covid crisis. Towards the end of 2019, and in early 2020, the government enacted deep tax cuts in fulfilment of an election promise, presumably to help its election backers and stooges. This led to the loss of approximately one million taxpayers between 2020 and 2022. Therefore, the country lost more than Rs 500 billion in tax money per year, due to tax cuts.
The economist said that this year the economy is expected to contract by around 8 per cent of gross domestic product as investment and consumption falls as efforts are made to stabilize the economy, compounded by lack of capital inflows due to weak confidence and banks also repaying foreign credits.
The Central Bank of Sri Lanka today (07) presented its flagship publication, the Annual Economic Review for 2024 (AER 2024), to President and Minister of Finance, Anura Kumara Disanayake, highlighting the steady progress of Sri Lanka’s economic recovery following the country’s most severe downturn in recent history.
The report was officially handed over by Dr. P. Nandalal Weerasinghe, Governor of the Central Bank, during a special ceremony held at the Presidential Secretariat.
AER 2024 comprises four main chapters: Macroeconomic Developments, Conditions of the Financial System, Review of Central Bank’s Policies and Macroeconomic Outlook.
According to the Review, the Sri Lankan economy showed significant signs of recovery in 2024, following the deep economic crisis experienced two years ago. The recovery trajectory, though challenging, has been notably faster than that of many other debt-distressed countries.
Improvements in economic activity, a partial resurgence in purchasing power and reduced uncertainty are among the key positive indicators noted in the report.
The event was attended by Dr. Nandika Sanath Kumanayake, Secretary to the President, K. M. Mahinda Siriwardena, Secretary to the Treasury, Mrs. K. M. A. N. Daulagala, Senior Deputy Governor, Dr. C. Amarasekara, Assistant Governor, Dr. (Mrs.) S. Jegajeevan, Director of Economic Research and Dr. L. R. C. Pathberiya and Additional Director of Economic Research at the Central Bank Dr. V. D. Wickramarachchi.
[PMD]
Business
IceWarp expands into Sri Lanka, fostering European innovation in collaboration with FentonsIT
IceWarp, a global leader in business communication solutions, has officially launched its cutting-edge platform in Sri Lanka, bringing European expertise in email and collaboration solutions to support the country’s evolving business landscape.
This expansion is driven by a strategic partnership with Fentons Information Technology (FIT), the Information Technology arm of Hayleys Fentons Limited.
The grand launch event held at The Kingsbury Colombo on 4th April, 2025, was graced by several distinguished guests, including Chief Guest Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC.
The presence of Adam Paclt, Global CEO of IceWarp, and Pramod Sharda, CEO for India and the Middle East of IceWarp, along with their global team, highlighted the significance of this expansion. Industry experts, government officials, corporate leaders, and CIOs from the banking, financial services and insurance sectors were in attendance as well, reflecting strong local interest in IceWarp’s European expertise.
With this launch, Sri Lankan businesses now have access to an affordable, scalable and secure alternative to Microsoft 365 and Google Workspace. IceWarp’s advanced Collaboration Suite integrates a wide range of tools into a single, unified platform designed to streamline communication and boost productivity. Offering flexible hybrid deployment options and cost-efficient solution, IceWarp enables organisations to optimise their operations without compromising security or functionality.
Ceylon Energy and HJT China have successfully completed the Mahiyangana-Kappalthurei 33kV power distribution lines and the Uhana Gantry as part of Sri Lanka’s Supporting Electricity Supply Reliability Improvement Project (SESRIP). Funded by the Asian Development Bank ($42 million), SESRIP aims to expand energy access in underserved regions, including conflict-affected areas and provinces like Uva and North Central.
The project’s infrastructure spans over 270 km of 33kV lines, 13 switching gantries, and 2,372 km of low-voltage extensions.
The projects connect 35,000+ households and improve reliability for 493,000+ consumers; integrates renewables to reduce losses.
The projects’ notable components include: Mahiyangana-Bibila Line: 36 km with 147 steel towers and Kappalthurei-Sixth Mile Post Line: 14 km with 58 towers.
Ceylon Energy Chairman Madushanka Fernando hailed it as a ‘new beginning of a brighter era’, emphasising the project’s role in uplifting rural communities and driving sustainable development.
The initiative underscores Sri Lanka’s commitment to inclusive, reliable energy and climate resilience.
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