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Uncertainty over impending elections could risk Lanka’s economic recovery: ADB

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The “uncertainty” over the impending elections in Sri Lanka will cause a possible downward trend in the country’s economic outlook, the Asian Development Bank (ADB) has said, according to a PTI dispatch.

Sri Lanka is set to face a presidential election in the last quarter of this year, while the parliamentary election is due mid-next year. However, political uncertainty prevails in the country as opposition parties have pledged to reverse the current IMF-linked reforms, which have proved to be unpopular with the masses, the PTI repor says.

President Ranil Wickremesinghe, who has steered the recovery programme by going into a bailout deal with the International Monetary Fund (IMF) for a USD 2.9 billion facility, maintains that the island could once again face economic collapse if the IMF programme reforms are not adhered to.

Outlining the economic risks Sri Lanka is facing, the ADB in its South Asian chapter’s economic trends report released yesterday said, Among them the most important is uncertainty associated with the upcoming elections, including any possible impact on fiscal policy and reform implementation.

The ADB noted that there are signs of economic recovery in Lanka and emerging growth had revived in the second half of 2023 and is expected to continue in 2024 and 2025.

Inflation decelerated in single digits last year following a peak in 2022 and will remain below 10 percent in 2024 and 2025. Challenges remain and the upcoming electoral cycle must not delay the reforms required to address the recent economic crisis. Sri Lanka needs to address vulnerability to poverty to ensure inclusive growth, the report said.

It’s been two years since Sri Lanka declared its first-ever default of sovereign debt. The negotiations for debt restructuring continue.

Delays in the completion of a debt restructuring agreement and any barriers to passing key legislation could dampen sentiment and derail growth, the report warned.

The IMF in March said it had reached a staff-level agreement with Sri Lanka for the next phase that would enable it access to USD 337 million from the nearly USD 3 billion bailout approved in 2023 for the island nation.

Two tranches of USD 330 million each were released in March and December 2023 even as the global lender praised Colombo for its macroeconomic policy reforms, which it said, are starting to bear fruit.



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Govt. extends ban on LTTE

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The NPP government has issued a new extraordinary gazette renewing and extending Sri Lanka’s long-standing ban on the LTTE and several Tamil diaspora organisations and individuals, continuing to designate them as “terrorists”.

The gazette, published recently, replaces a previous gazette issued in May 2025 and reaffirmed the proscription of a wide range of Tamil political and advocacy bodies operating around the world, alongside dozens of named individuals. The government alleged both the organisations and individuals listed are involved in “terrorism-related activities”.

The organisations blacklisted by the Sri Lankan government include:

• Liberation Tigers of Tamil Eelam (LTTE)

• Tamil Rehabilitation Organisation (TRO)

• Tamil Coordinating Committee (TCC)

• World Tamil Movement (WTM)

• Transnational Government of Tamil Eelam (TGTE)

• World Tamil Relief Fund (WTRF)

• National Council of Canadian Tamils (NCCT)

• Tamil Youth Organisation (TYO)

While the majority of the designations mirror those contained in the May 2025 gazette, the latest document updates identification details and addresses for a number of individuals and introduces at least one additional organisation to the list. All entries have been reissued under new reference numbers for 2026, though the underlying allegations and framing remain unchanged.

Successive governemnts have maintained a sweeping proscription regime against Tamil diaspora groups and individuals. A ban can make it a criminal offence for Sri Lankan citizens to maintain contact with these organisations or their members, severely restricting political engagement and stifling links between the diaspora and the Tamil homeland.

The original mass listings were introduced in 2014 under the administration of Mahinda Rajapaksa. Despite repeated outcry, subsequent governments have continued to uphold and renew the proscription regime, even after the Rajapaksas were voted out of power.

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Police obtain court order banning Wimal’s protest

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National Freedom Front (NFF) leader Wimal Weerawansa addresses a gathering outside the Education Ministry on Monday before launching a protest demanding the immediate resignation of Prime Minister Dr. Harini Amarasuriya as Education Minister over the inclusion of a link to an adult content website in the Grade 06 English module. (Pic by Thushara Atapattu)

Police yesterday (12) obtained an injunction order from the Kaduwela Magistrate’s court against the protest launched by National Freedom Front (NFF) leader and former Minister Wimal Weerawansa opposite the Education Ministry, Isurupaya, at Battaramulla.

Police informed Weerawansa of the court order. In line with the court order, the police informed Weerawansa that the road near the Ministry should not be obstructed and that no sound amplification equipment be used while the GCE Advanced Level (A/L) examination is in progress. The examination, put off due to Cyclone Ditwah, recommenced yesterday.

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Chinese Foreign Minister Wang Yi expresses optimism that Sri Lanka is on the right path to progres

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FM Herath with his Chinese counterpart Wang Yi

Minister of Foreign Affairs, Foreign Employment and Tourism Vijitha Herath held productive discussions with his Chinese counterpart Wang Yi today (12/01), during the latter’s brief visit to Sri Lanka.

The meeting aimed at further strengthening bilateral engagement and advancing the Strategic Cooperative Partnership between the two countries. Both Ministers reaffirmed the longstanding friendship and time-tested cooperation between Sri Lanka and China rooted in centuries of exchanges and consolidated since the establishment of diplomatic relations seven decades ago. The discussion also focused on enhancing partnership in the areas of trade, investment, development cooperation and tourism.

Minister Herath extended deep appreciation to the Government and the people of China for the steadfast support extended to Sri Lanka following cyclone Ditwah and requested further support for the second phase of resettlement, relocation and rebuilding, particularly for the restoration of affected infrastructure including identified roads, railways and bridges that are vital to connectivity, economic recovery and daily lives of people. Minister Wang assured China’s fullest support for this initiative and expressed confidence that Sri Lanka will continue its rapid recovery under the leadership of President Anura Kumara Disanayaka. He also welcomed the people-centric policies of the Government and expressed optimism that Sri Lanka is on the right path toward fulfilling aspirations of its people.

Minister Herath expressed appreciation for China’s constructive role in international fora and reiterated Sri Lanka’s firm commitment to the One China Policy and China’s sovereignty and territorial integrity.

Both Ministers also recalled the successful high level exchanges in the recent past, including visits of the President and the Prime Minister of Sri Lanka to China in 2025.

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