The total outstanding market liquidity surplus or excess funds available in Sri Lanka’s banking system for lending and transactions declined by Rs. 36.65 billion in a week, according to the Central Bank’s latest economic indicators report.

An economic researcher analysing the data noted: “Treasury bill and bond auctions likely drained liquidity. If this tightening persists, short-term interest rates could rise, raising borrowing costs and potentially slowing economic growth. The situation warrants close monitoring, especially as the manufacturing sector is already facing a slowdown whether due to seasonal or structural factors.”

The report also highlighted the following developments in Sri Lanka’s economy:

Fiscal improvements: The deficit has narrowed but remains elevated.

Sectoral trends: The stock market rallied, and the services sector showed slower expansion (tourism, retail and IT driving resilience).

Total expenditure and net lending increased to Rs. 1,301.9 bn during the three months ending March 2025 compared to Rs. 1,197.5 bn in the corresponding period of 2024.

During the three months ending March 2025, the overall budget deficit decreased to Rs. 234.5 bn compared to Rs. 281.3 bn recorded in the corresponding period of 2024

The rupee value of T-Bills and T-Bonds held by foreign investors decreased by 2 per cent in comparison to the previous week.

“The April 2025 industrial slowdown points to weaker output, likely due to seasonal factors such as holidays or subdued demand. However, this was partially offset by an expansion in the Services PMI, offering some relief. The broader economic outlook for Sri Lanka remains uncertain, as these mixed signals unfold as Sri Lanka would receive a tariff letter from the US in the coming weeks. With market liquidity already tightening due to government borrowings from the banking system, policymakers face mounting challenges in balancing growth and stability,” the economic researcher noted.

By Sanath Nanayakkare

AIA Sri Lanka’s ‘Pawfect Match’ campaign, in partnership with animal welfare groups, inspired 500+ adoptions of stray pets. The initiative highlighted adoption, responsible ownership, and compassion, tackling Sri Lanka’s stray animal crisis. AIA thanks all supporters for their life-changing impact.

The campaign served as a reminder that even small acts of kindness like adopting a stray can make a big impact. It also provided an opportunity for the public to learn more about responsible pet ownership, animal rights, and the importance of compassion toward all creatures.

Calton Sweet House Pvt. Ltd., a key part of Calton Group, was honored as the Best National Industry Brand in the Medium-Scale Food and Beverage Sector at the National Industry Brand Excellence Awards 2024, organized by the Industrial Development Board. Deshamanya Mahesh De Silva, Director of Finance and IT at Calton Group, accepted the award.

Established in 1991, Calton Sweet House has over 30 years of excellence, specializing in cakes, snacks, and frozen bakery items, with 20+ outlets across Negombo, Katunayake, and Colombo, including at Bandaranaike International Airport. The company holds ISO, HACCP, and GMP certifications, ensuring top-quality standards.

Starting as a small store in 1983, Calton Group now employs 300+ staff and operates multiple businesses, including Calton Hyper Market and Calton Catering, while partnering with global brands like Unilever and Upfield. The group remains committed to serving customers with high-quality, safely packaged food products.