Business
Sri Lanka’s economy walks a tightrope between growth and risk
In the latest economic indicators report, the Central Bank of Sri Lanka has painted a picture of an economy showing some encouraging signs while grappling with significant challenges.
The Island Financial Review asked an economic analyst to explain the latest indicators to help understand what they mean for everyday Sri Lankans. His analysis is as follows:
Positive Indicators
= Government Revenue:
For the first seven months of 2025, government revenue has increased significantly, reaching Rs. 2,734.9 billion compared to Rs. 2,161.8 billion in the same period last year. This suggests improved tax collection and economic activity.
=Credit to the Private Sector:
Outstanding credit to the private sector grew by 19.6% year-on-year, amounting to Rs. 201.5 billion in July 2025. This indicates that businesses are borrowing more, potentially leading to expansion and job creation.
=Monetary Conditions:
The Average Weighted Call Money Rate remained stable at 7.86%, suggesting a balanced liquidity situation in the banking sector.
=Foreign Currency Reserves:
Sri Lanka’s gross official reserves are estimated at USD 6,166 million, bolstered by arrangements such as the swap with the People’s Bank of China. This provides a cushion against external shocks.
Underlying Issues
= Investor Confidence:
Despite the positive indicators, there are growing concerns about investor confidence. The All Share Price Index (ASPI) fell by 0.03% during the week, reflecting hesitancy among investors. The S&P SL 20 Index also dropped by 1.19%, indicating uncertainty in the stock market. These indices show even more negative trends Month-to-Date and Year-to-Date.
=Government Debt:
The total outstanding central government debt has increased to Rs. 29,436.6 billion, raising concerns about sustainability. The reliance on debt to finance government operations could pose risks for future economic stability.
=Workers’ Remittances:
Workers’ remittances fell from USD 697.3 million in July to USD 680.8 million in August 2025. This decrease could impact household incomes and overall consumption in the economy.
=Local Currency:
The Sri Lankan rupee has depreciated by 3.2% against the US dollar Year-to-Date, which can lead to higher costs for imported goods and inflationary pressures.
When asked to sum up his take on the economic outlook, he stated, “According to the data points, the government’s reliance on domestic financing significantly has eased in the first seven months of 2025, with net borrowing falling by over 23% compared to the same period in 2024. This improvement in the fiscal position has been further underscored by a sharp reversal in foreign financing, which shifted from a net inflow of Rs. 83.4 bn to a net repayment of Rs. 45.6 bn, reflecting reduced external borrowing needs and a focus on debt consolidation.
Furthermore, the Central Bank’s net purchase of USD 142.5 million in August 2025 indicates a building of foreign exchange reserves, which is a positive signal for external sector stability and suggests a potential strengthening of the country’s balance of payments. However, as the Central Bank continues to highlight the favorable indicators, it is crucial for policymakers to address the underlying issues that threaten economic stability.
Although the improvement in key indicators demonstrates successful fiscal consolidation, the ultimate test lies in whether this can catalyse a rebound in foreign investor confidence and generate significant foreign inflows, which are critical for robust economic growth.”
By Sanath Nanayakkare ✍️
Business
APHNH aims to make Sri Lanka more competitive for healthcare investment
Sri Lanka private healthcare leaders recently pledged an action plan with timelines to address the practical priorities of Sri Lanka’s healthcare sector while making it more viable for local and foreign investments.
The Association of Private Hospitals and Nursing Homes (APHNH) has committed to converting recommendations from its first Healthcare Leadership Summit into a trackable outcome document with defined actions, responsibilities, and timelines, marking a shift from discussion to implementation in sector reform efforts.
The summit held on March 9 at Waters Edge, Colombo, brought together hospital leaders, policymakers, regulators, insurers, and international experts to address practical priorities for Sri Lanka’s healthcare sector.
A key outcome of the summit was APHNH’s plan to consolidate recommendations into a single, trackable charter that will outline specific actions, assign responsibilities, establish timelines, and provide periodic progress updates.
“Our objective is to bring the right decision-makers into one room and focus on what can be implemented, not only what can be discussed, ” said Raveen Wickremesinghe, President of APHNH. “We are committed to taking the inputs from today and converting them into a clear, trackable set of actions that strengthens quality, transparency and public confidence, while supporting national health priorities. “
The summit featured insights from Dr. Hafeez Rahman Padiyath, Dr. Hamdani Anver, and Chandana L. Aluthgama on scaling quality and operational discipline. A keynote and fireside discussion with Dr. Paiboon Eksangsri, President of the Private Hospital Association of Thailand, explored lessons from Thailand’s private healthcare development and conditions for making Sri Lanka more competitive for healthcare investment.
By Sanath Nanayakkare
Business
Atlas SipSavi Naththal Poronduwa records positive public participation, benefiting 10,000 students
Atlas, Sri Lanka’s No. 1 learning brand, successfully concluded Atlas SipSavi Naththal Poronduwa, a national initiative that saw strong public participation in supporting children at risk of dropping out of school due to financial hardship. At a time when more than 22,000 Sri Lankan children leave school each year due to rising economic challenges, the initiative reinforced Atlas Sipsavi’s long-standing ‘No Child Left Behind’ promise by turning seasonal generosity into meaningful educational support.
The initiative reached 10,000 students, with beneficiary schools carefully selected to ensure support reached those most in need. The collected books were distributed to children at risk of dropping out, including those whose education had been disrupted by recent adverse weather, ensuring students had essential learning resources at the start of the new school term. Through its flagship Atlas SipSavi programme, the brand focused on improving access to education by providing essential learning tools, scholarships, and infrastructure to create better learning environments, bringing its purpose of ‘making learning fun’ to life in a meaningful way. As part of the initiative, the public was invited to donate schoolbooks, with each contribution matched one-for-one by Atlas. Donation boxes were placed at all Keells outlets island-wide and at Sarvodaya District Offices, making it easy for communities to take part.
Business
John Keells Logistics expands strategic engagement with CWIT through inter-terminal transport operations
John Keells Logistics (Pvt) Ltd (JKLL), one of Sri Lanka’s leading third-party logistics solutions providers, has successfully expanded its operational engagement with Colombo West International Terminal (Private) Limited (CWIT), through inter-terminal transport services within the Port of Colombo. This enhanced engagement further strengthens CWIT’s efforts to improve operational efficiency, reliability, and scalability across terminal activities.
Inter-terminal transport plays a critical role in modern port operations, requiring high levels of coordination, precision, and operational discipline. JKLL’s appointment for ITT operations reflects CWIT’s confidence in the company’s demonstrated capabilities in managing complex transport operations within a high-throughput port environment.
The ITT operations are underpinned by JKLL’s technology-enabled logistics framework, incorporating real-time fleet tracking, performance monitoring systems, and data-driven operational planning. These capabilities provide enhanced visibility and control over transport movements, while ensuring compliance with established safety, productivity, and service quality standards.
The awarding of this engagement to JKLL is a testament to the successful implementation of the Inter-Terminal Vehicle (ITV) operations undertaken by John Keells Logistics at CWIT during the previous year. The ITV assignment was executed through structured operating procedures and disciplined service delivery, contributing to improved cargo movement, operational coordination, and service continuity within the terminal. The performance outcomes of the ITV operations provided the basis for the subsequent expansion of the partnership into ITT services.
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