Category: Daily Financial Times

Adviser to the President on Economic Affairs and Finance Duminda Hulangamuwa yesterday said that the key theme of the 2026 Budget is mobilising private capital and restoring the private sector’s role as the ‘engine of growth.’

‘Almost every major reference in the Budget from tax incentives to institutional reforms is directed toward encouraging private sector participation,’ he said at the Daily FT-Colombo University Alumni Association post-Budget Forum.

Hulangamuwa said the country’s path to achieving 7% growth will depend not merely on fiscal policy, but on rebuilding Sri Lanka’s credibility through consistent policies, rule of law and the active participation of the private sector in driving investment and development.

He explained that the 2026 Budget was crafted not only to stabilise the economy, but to lay the groundwork for sustained, broad-based growth powered by private enterprise, structural reforms and good governance.

He said that while Sri Lanka is likely to achieve 3-4% GDP growth in the short term, sustaining a higher trajectory of 6-7% is critical for meaningful development that benefits the wider population.

‘If we are to ensure that the benefits of economic growth reach all citizens, we must grow by 7%. Growth cannot come from fiscal tools alone, it requires consistency, credibility and trust in governance,’ he added.

Hulangamuwa said one of the main lessons from the experiences of Asian peers such as Singapore, Malaysia and Vietnam was that policy consistency and credibility is not just reforms, it fuels investor confidence and economic transformation.

‘In the past, we changed fiscal and monetary policies almost every year. Interest rates, taxation and exchange rate directions shifted without predictability. That undermined investor trust. The most important thing is for the country, not just the Budget, to demonstrate policy stability and credibility,’ he pointed out.

He further stressed that the rule of law and zero tolerance for corruption are essential preconditions for both domestic and foreign investment. ‘Investors must know that in Sri Lanka, laws apply equally to all, and that you don’t need to go behind officials or offer favours to get approvals anymore,’ he said.

He cited Singapore’s governance model which is built on transparency, accountability and fair application of law as an example Sri Lanka should emulate. ‘That is how those countries grew; with consistent policies and honest, transparent governance,’ he opined.

He said that four landmark legislations; Public-Private Partnership (PPP) Act, State-Owned Enterprise (SOE) Act, Strategic Development Projects Act and revised Port City Economic Commission Law will underpin the new economic framework, which are expected to be presented to Parliament before the end of this year and early next year.

‘These laws will provide the legal and structural foundation for long-term foreign direct investment (FDI) inflows,’ he said, adding that the PPP Act will unlock new opportunities in infrastructure, energy and logistics through transparent and competitive processes.

He also noted that one major challenge for new investments is the limited availability of land for industrial development, since most of country’s landmass is categorised as agriculture, plantations or forest reserve.

‘To address this, the Government is developing a ‘land bank’ coordinated through the Presidential Secretariat, to systematically identify and release land for industrial and commercial use, while protecting environmental zones,’ he said.

Beyond the Budget, Hulangamuwa said the Government has already launched multiple initiatives to mobilise private participation, monetise public assets and revitalise dormant projects. ‘There is a visible shift in how we are engaging the private sector, not just through policy, but through actual projects that had been stuck for years,’ he added.

He cited several examples of renewed investor activity. ‘Phosphate mine in Eppawala, unused since 1998 due to legal disputes, have now been cleared for private investment with new expressions of interest (EOIs) called. The graphite and ilmenite mining projects are being reopened for investment under competitive EOIs. Plantation lands in the Matale and Kandy districts, covering about 3,000 acres, have attracted 480 EOIs from private partners and Pelwatte National Livestock Development Board (NLDB) farms and Bogambara redevelopment projects are preparing for new calls for EOIs and Requests for Proposals (RFPs). These are all examples of projects that were stagnant for decades and are now being revived with private participation,’ he noted.

Hulangamuwa also referred to recent wind power projects in Silavatura, which were awarded through a fully transparent, competitive tender at below four US cents per kilowatt-hour (kWh), as a model of the new governance approach.

‘This is what both local and foreign investors look for; open, competitive processes that ensure value for money and fairness,’ he said, calling it ‘a foundation for future investor confidence.’

He stressed that the Government’s efforts to transform the economy go far beyond the annual Budget, encompassing a wide set of reforms to enhance efficiency, monetise State assets and strengthen market liquidity. ‘The groundwork has been laid over the past year. Now the next phase is to build on that foundation to move the economy towards a 7% growth path,’ he said.

According to him, policy stability, private sector empowerment and institutional reforms are not separate tracks, but part of an integrated economic strategy. ‘The Budget provides the fiscal framework. But consistency, credibility, and governance are the pillars on which long-term growth must stand,’ he stressed.

The Cabinet of Ministers on Monday approved the procurement of vehicles for the Department of Prisons, allocating Rs. 774 million to enhance the department’s operational efficiency in managing court-related duties and inmate welfare.

The procurement, conducted under the National Competitive Procurement Procedure, aims to equip the Department of Prisons with essential vehicles to efficiently carry out duties connected with Courts and the welfare of remanded inmates.

The purchase includes 30 buses with 44 seats, 10 buses with 30 seats, 10 vans, five gully bowsers and three tractors.

‘Eight bidders submitted proposals for the supply of these vehicles, and following recommendations by the High-Level Standing Procurement Committee, the Cabinet approved the awards as follows: Lanka Ashok Leyland PLC for 30 buses (44 seats) and 10 buses (30 seats), Toyota Lanka Ltd., for 10 vans, Solex Technologies Ltd., for five gully bowsers and Browns and Co PLC for three tractors,’ Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting media briefing yesterday.

He also confirmed that the total cost for the procurement would amount to Rs. 774 million, noting that the acquisition is intended to improve the Department’s capacity to transport inmates and maintain operational efficiency.

The proposal to this effect was submitted by Justice and National Integration Minister Harshana Nanayakkara.

The 2026 Budget has been hailed for continuing the trajectory of fiscal consolidation and reforms. Compliance with the IMF-mandated revenue-based fiscal consolidation has been instrumental in restoring macroeconomic stability and normalcy from the depths of economic devastation experienced in 2022.

According to the 2025 Revised Budget Estimates, the Budget deficit for this year is expected to be Rs. 1,448 billion, compared to Rs. 2,040 billion in 2024. The Treasury is not expected to borrow at all from banks to finance the shortfall, thus, leaving more financial resources available to fund the requirements of the private sector-led investments.

In a salutary move, the Government has envisaged to consolidate the functions of the Industrial Development Board (IDB), National Enterprise Development Authority, and Small and Medium Enterprise Development Division and bring them under the supervision of the IDB. Hopefully, the move would establish an integrated framework for the development of SMEs in the country. The Government intends to provide credit guarantees for loans amounting to around Rs. 7 billion next year to enable SMEs to obtain loans without collateral under the National Credit Guarantee Institution, which began its commercial operations last January.

Highlighting the importance the administration has placed on the promotion and development of exports, the Government has allocated a significant amount of funds to the premier State Export Promotion and Development agency – the Sri Lanka Export Development Board (EDB). The EDB has been allocated Rs. 250 million under the National Export Brand Promotion Plan while a further Rs. 250 million in addition to the provisions allocated to the EDB’s routine activities such as participation in trade fairs, promotion of SMEs, etc. 2026 will be a landmark year for the country’s export sector as the EDB plans to host Sri Lanka Expo 2026 after a gap of 14 years. The event is expected to attract around 1,500 participants, including exporters, SMEs, buyers, and investors.

Apart from achieving fiscal prudence and discipline, the Government also needs to focus on accelerating economic growth to provide tangible benefits to the masses. With the IMF program in effect, the Government has been constrained in terms of spending extensively on development projects. Under such circumstances, policymakers need to think out of the box and vigorously explore avenues such as Public-Private Partnerships (PPPs). Our giant neighbour India has achieved considerable progress in infrastructure development by successfully adopting the PPP model in spheres like highway development, the creation and management of modern airports and ports, railway station redevelopment, and large-scale renewable energy projects. The Government has moved in the right direction in this regard by drafting the PPP Act and plans are underway to introduce the act early next year.

The Budget has also allocated Rs. 5 billion to increase the current minimum daily wage of estate workers from Rs. 1,350 to Rs. 1,550 apart from paying a daily attendance incentive of Rs. 200. However, critics have described it as unwarranted intervention on the part of the Government. Industry experts have slammed the move due to its absence of productivity linkage.

The implementation of Budget proposals effectively has been a huge cause of concern for a considerable period of time. Archaic and cumbersome procurement guidelines and regulations have always stifled the implementation of Budget proposals. There is a huge responsibility on the part of the public sector officials to contribute effectively towards the realisation of Budgetary objectives.

Powering one of Sri Lanka’s most electrifying motorsport events of the year, Exide was the partner of the Gunner Supercross 2025. Held in October at the Sri Lanka Army Base, Minneriya, the race brought together speed, skill and adrenaline coupled with high-octane action for all race enthusiasts. Organised by the Sri Lanka Automobile Sports Drivers Association (SLADA) in collaboration with the Sri Lanka Army Artillery Division, the Gunner Supercross featured a line-up of renowned motorbike riders as well as car and truck drivers who battled it out across 11 categories, thrilling motorsports fans across the country.

Exide Racing Brand Ambassadors dominated the spotlight in their respective categories yet again. Champion driver, Ashan Silva blazed through the track winning the SLGT – 3500cc main event and earning the Best Driver of the Meet title. Motocross prodigy, Jacques Gunawardena showcased his unmatched skill and control, claiming victory in the Group MX – Bikes 100CC-125CC (2T) and 175CC-250CC (4T) categories, securing the coveted Best Rider of the Meet award.

The action continued with RoadX Racing Brand Ambassador, Chamod Samarakoon bringing the crowd to its feet with a spectacular win in the T and G Diesel Trucks Category, powered by RoadX Radial Tires, ranked as the tenth largest tire manufacturer in the world, proudly marketed in Sri Lanka by Browns and trusted across 180 countries.

Brown and Company PLC Cluster Chief Operating Officer – Automotive and Hardware Ajith de Silva said, ‘We are proud to be part of such a prestigious event in Sri Lanka’s motorsport calendar. Both Exide and RoadX are brands built on power, endurance, and trust; qualities that define champions. These partnerships go beyond sponsorship, they represent our commitment to driving motorsports forward in Sri Lanka.’

From the sound of the roaring engines to the cheers of the crowds, the Gunner Supercross 2025 was a celebration of speed, endurance and sportsmanship. Under the 150-year legacy of the Browns Group and over 100 years of Exide in Sri Lanka, the brand remains committed to fuelling motorsport dreams, empowering budding champions and driving the nation’s racing spirit to new horizons

First Capital Holdings PLC yesterday announced a stellar performance for the six months ended 30 September, recording a Profit after Tax of Rs. 3.43 billion, a substantial increase from Rs. 897 million in the corresponding period of the previous year.

Managing Director/CEO Dilshan Wirasekara said, ‘This performance reflects the Group’s disciplined strategic execution, agile response to market dynamics and continued leadership across key segments of Sri Lanka’s capital markets.’

The Group’s Net Trading Income before Operating Expenses for the first half of 2025/26 stood at Rs. 5.46 billion, compared to Rs. 1.88 billion in the same period of the previous year, underscoring the strength of its diversified business model and its ability to capitalise on favourable market opportunities.

During the period under review, a moderate decline in interest rates was observed following the reduction in the monetary policy rate in May 2025, despite marginal upward pressure on Government Securities yields towards the end of the second quarter. This monetary stance fostered positive conditions for trading activities, particularly within the equity market. Consequently, the Primary Dealer and Corporate Dealing Securities divisions emerged as the largest contributors to the Group’s overall trading income.

The Group’s Primary Dealer division reported a Profit after Tax of Rs. 1.57 billion for the first six months ended 30 September, compared to Rs. 578 million in the previous year. The results include a trading gain on Government Securities amounting to Rs. 1.81 billion and net interest income of Rs. 988 million (first six months of 2024/25 – trading gain of Rs. 396 million and net interest income of Rs. 834 million).

The Corporate Finance Advisory and Corporate Dealing Securities divisions delivered a Profit after Tax of Rs. 1.81 billion for the six months ended 30 September, a substantial increase from Rs. 264 million reported in the first six months of previous year, reflecting the growing demand for strategic financial solutions and the Group’s continued focus on creating value for its clients and stakeholders.

The Wealth Management division reported a Profit after Tax of Rs. 48 million for the six months ended 30 September (first six months of 2024/25 – Rs. 49 million), with Assets under Management (AUM) standing at Rs. 99 billion as of 30 September (31 March – Rs. 112 billion).

The Stock Brokering division recorded a Profit after Tax of Rs. 116 million for the six months ended 30 September, compared to Rs. 6 million in the corresponding period of the previous year, a clear indicator of renewed investor participation and improved market sentiment.

In recognition of the strong performance, the Board of Directors of the company declared an interim dividend of Rs. 7 per share, amounting to Rs. 2.84 billion for the year 2025/26 in October 2025.

Chairman Rajendra Theagarajah said: ‘Our performance this year reflects the effectiveness of our strategy and the strength of our people. We continue to navigate a rapidly changing market with clarity and conviction, driving sustainable growth while delivering long-term value to our stakeholders. The results reinforce our confidence in the fundamental opportunities within Sri Lanka’s capital markets and our resolute commitment to deepening our contribution to the country’s financial ecosystem.’

Managing Director/CEO Wirasekara said: ‘Each of our business segments continues to demonstrate strong operational momentum, supported by strategic agility and a culture of innovation. We remain focused on strengthening our leadership in the capital markets space, leveraging our expertise to help investors and institutions unlock long-term value and opportunity.’

Adding to this positive momentum, the Lanka Credit Rating Agency Ltd., (LRA) upgraded the company’s credit rating to ‘A+’ from ‘A’, with a stable outlook, reflecting strengthened financial strength and market confidence. This upgrade reflects First Capital’s sustained profitability, sound capital structure, robust governance and strategic leadership in Sri Lanka’s evolving capital market landscape.

Economist Dr. Roshan Perera yesterday cautioned that the country’s revenue targets may be difficult to achieve amid limited new tax measures, rigid recurrent spending and a still fragile post-crisis recovery where poverty remains above 20%.

Speaking at the Daily FT-Colombo University Alumni Association post-Budget forum panel discussion, former Central Banker commended the 2026 Budget’s continuation of macroeconomic stability measures, but warned that maintaining fiscal prudence after the IMF program ends will be the real test of policy credibility.

‘Given Sri Lanka’s past experience with IMF programs, new Government’s often relax their fiscal discipline once the program ends. Thus continuing this framework is a commendable achievement, but we must ensure the commitment remains even after phasing out of the IMF arrangement,’ she stressed.

Dr. Perera noted that Sri Lanka has rarely recorded primary surpluses in its post-independence history, with only a handful of instances in the 1950s, 1992, 2017, and 2018.

In recent years, however, the country has recorded three consecutive primary surpluses and is Budgeting for another in 2026, which she described as ‘a positive signal of renewed fiscal discipline.’

‘It’s interesting that in almost every instance where we achieved a primary surplus, Sri Lanka was either under an IMF program or had just come out of one. That tells you how contingent this fiscal discipline is on external oversight,’ she observed.

She insisted on the need to sustain primary surpluses till debt becomes truly sustainable, urging policymakers not to relax consolidation efforts prematurely.

Dr. Perera took a slightly more cautious view than other panellists on the Budget’s revenue targets, noting that while maintaining a revenue-to-GDP ratio of 15% or above is critical for the Government to function effectively, the 2026 projections appear ‘ambitious.’

‘There are very few new tax measures in the Budget 2026 apart from the reduction in VAT and SCL thresholds, which broadens the tax base and is welcome but we don’t have clarity on the expected revenue yield,’ she pointed out.

She also questioned the sustainability of import-based tax revenue, noting that a large share of the 2025 revenue boost came from vehicle imports, which may not repeat in 2026 due to policy curbs. ‘These include the Special Excise Levies (SSEL) on car imports and loan-to-value (LTV) restrictions imposed by the Central Bank on vehicle financing, which could constrain demand,’ she added.

As a result, she said revenue gains must come primarily from improved tax administration, not new taxes.

Dr. Perera welcomed the Government’s plans to implement a national e-invoicing system and upgrade the RAMIS 3.0 tax administration platform, but cautioned against overestimating near-term benefits.

‘Malaysia took nearly two years to roll out e-invoicing and even now, it’s mainly used for data collection rather than tax assessments. Sri Lanka’s implementation will require both the IRD and companies to adapt, so we should be realistic about timelines and outcomes,’ she explained.

The economist also expressed concern that the Budget continues to rely heavily on indirect taxes, despite policy intentions to rebalance the tax mix from the current 25:75 ratio (direct to indirect) toward 40:60.

‘Even with the latest measures, this imbalance will persist. Heavy reliance on indirect taxes burdens low-income households disproportionately,’ she said, warning that any future revenue shortfalls will likely come at the cost of reduced capital expenditure, further dampening growth prospects.

On the expenditure side, Dr. Perera urged a rethink of the composition and efficiency of Government spending.

She acknowledged that interest payments offer limited flexibility, but stressed the need to contain the wage bill, which continues to rise as a share of GDP-3.6% in 2024, 3.8% in 2025 and projected to remain at 3.8% in 2026.

Against the backdrop, she pointed that the 2026 Budget also envisages recruiting 75,000 new public servants, with 10,000 being made permanent. ‘While some sectors may require additional staff, we must rationalise Government employment. We already have around 1.4 to 1.5 million civil servants excluding the Defence forces accounting for roughly 15% of the workforce. With digitalisation underway, we must ask whether such expansion is necessary,’ she argued.

In terms of welfare and inclusivity, Dr. Perera noted that while macroeconomic stabilisation has been achieved, the benefits have not yet reached ordinary citizens. ‘Growth remains weak, poverty exceeds 20%, and real wages have not recovered to pre-crisis levels due to high inflation,’ she said.

She pointed out that even with the Aswesuma social welfare program, total social transfers account for less than 1% of GDP, underscoring limited fiscal prioritisation for vulnerable groups. ‘If we want the public to support ongoing reforms, we must ensure that no one is left behind. Strengthening targeted welfare programs is essential to sustain political and social backing for reforms,’ she urged.

Dr. Perera stressed the importance of institutionalising fiscal discipline beyond the IMF program’s duration. ‘The true test will come once IMF oversight ends. If we can maintain fiscal prudence, strengthen tax enforcement and rationalise spending while supporting vulnerable households, then we can finally build a foundation for sustainable growth,’ she said.

Fitch Ratings yesterday gave a positive signal that the 2026 Budget proposals presented by President Minister Anura Kumara Dissanayake keeps Sri Lanka on the path towards fiscal consolidation.

The global ratings agency’s statement is an important development as the third $ 347 million tranche of the International Monetary Fund (IMF) Extended Fund Facility (EFF) is in the balance until Parliament approves a Budget that aligns with the ongoing program.

Fitch Ratings yesterday said Sri Lanka’s 2026 Budget keeps the country on its fiscal reform trajectory, though slower revenue growth, underspending on investment, and post-IMF debt risks could weigh on the outlook.

It said that the Sri Lankan Government’s latest Budget indicates that the authorities remain committed to reducing Government debt/GDP over the medium term after beating their targets in the 2025 Budget. Strong revenue performance will remain key to meeting the Government’s fiscal goals.

Fitch Ratings’ statement in full is as follows:

The Budget, unveiled on 7 November, targets a deficit of 5.1% of GDP in 2026, wider than the 4.5% that the Government expects in 2025.

The original deficit target for 2025 in last year’s Budget was 6.7% of GDP, but in March the IMF projected a lower figure of 5.4%.

The latest Budget forecasts the primary balance before interest payments will remain in surplus at 2.5% of GDP in 2026, down from an expected 3.8% in 2025, but still above the 2.3% target under Sri Lanka’s IMF program.

The Government aims to reduce the fiscal deficit to 3.8% of GDP by 2030 under its medium-term fiscal framework. Continuing to meet the key fiscal markers laid out in the IMF program would help the authorities to improve Sri Lanka’s policy-making record.

Macroeconomic stability would also benefit.

The official budget deficit projection for 2026 is wider than the 4.6% of GDP that we anticipated when we affirmed Sri Lanka’s rating at ‘CCC+’ in October 2025, and the primary surplus is marginally lower.

However, the effect on Sri Lanka’s debt trajectory could be more than offset by the over-performance in 2025, when we had expected a budget deficit of 5.4% and a primary surplus of 2.4%.

The Government expects revenue/GDP to decline to 15.4% in 2026, from 15.9% in 2025, although this is still above Fitch’s projection for 2026 of 15.3%. Failure to maintain growth in tax revenue in line with GDP could over time add to the fiscal stresses on Sri Lanka’s credit profile.

The Government assumes taxes from external trade will drop 1.2% in 2026 after a surge in vehicle imports lifted revenues this year. It also projects goods and services taxes will rise just 3.5%, with income taxes up 8%.

We view the goods and services tax projection as conservative, given that the authorities expect nominal GDP to increase by over 7% and new measures such as a lowering of the threshold for VAT registration and improvements to the tax auditing process could support revenue growth.

Upside surprises to import growth could also result in higher tax inflows, although Sri Lanka’s external balances could face additional pressure under such a scenario.

The outperformance in 2025 was partly driven by underspending, with the public investment/GDP ratio significantly below target, at 3.2% against the original goal of 4%.

Shortfalls in implementing planned investment spending could weaken the economy’s growth potential, making longer-term fiscal consolidation more challenging.

That said, the latest Budget highlights several measures that have the potential to lift investment and benefit growth.

These include the resumption of an expansion of Colombo’s international airport, a Rs. 342 billion (1% of 2026 Fitch-estimated GDP) allocation towards road development, tax incentives for the construction of digital infrastructure, and planned legislation to increase the use of public-private partnerships in infrastructure projects.

Sri Lanka’s high Government debt remains a key weakness for the sovereign credit profile.

In our October assessment, we projected that gross general Government debt/GDP would fall to about 96% in 2027, from 100.5% in 2024, remaining well above the median of 74% for sovereigns in the ‘CCC’ rating category.

The scheduled end of the IMF program in 2027 and our expectation that debt repayment obligations will step up from 2028 add to the risks facing the debt outlook over the medium term.

The Sri Lanka Apparel Brands Association (SLABA), representing all leading Sri Lankan apparel and fashion brands, said it enthusiastically welcomes the Budget, which addresses the majority of the industry’s key requests to strengthen the domestic apparel ecosystem, particularly regarding VAT and SMEs.

It commended the Government for responding decisively to industry concerns, particularly the implementation of VAT on imported fabrics, a critical measure advocated by local manufacturers to ensure fair competition and the reduction of the VAT threshold demonstrates a clear commitment to protecting domestic value chains.

SLABA President Fazal M. Fausz said: ‘We are pleased that the Government has heard us and taken decisive action on VAT for imported fabrics. These measures level the playing field for local manufacturers and SMEs who are vital to Sri Lanka’s economic growth and employment.’

The Budget’s provisions for CESS and duty revisions, coupled with investments in industrial estates, digital tax administration through mandatory e-invoicing, align closely with SLABA’s recommendations for sustainable industry development.

SLABA thanked the Industries Ministry, Finance Ministry, Inland Revenue Department, and Sri Lanka Customs for their meaningful engagement with industry stakeholders. As a collective of Sri Lanka’s leading apparel brands, SLABA remains committed to collaborating with policymakers to advance the sector’s competitiveness and contribution to national development, the association said.

Jannik Sinner began his ATP Finals title defence by sweeping aside a physically hampered Felix Auger-Aliassime in front of a passionate Turin crowd.

Italian second seed Sinner was imperious on serve in a 7-5 6-1 win over the Canadian.

Eighth seed Auger-Aliassime was brilliantly aggressive in a competitive first set and was two points away from forcing a tie-break before tweaking his left calf.

The 25-year-old called for the physiotherapist twice in the second set, where he won just one game.

Victory puts Sinner top of the Bjorn Borg Group as he bids to secure the year-end world number one ranking.

Sinner has not lost to a top-10 player that is not Carlos Alcaraz since being beaten by Andrey Rublev in August 2024 – at a tournament where Sinner played two matches in one day.

Earlier, Taylor Fritz shone on serve to beat Lorenzo Musetti 6-3 6-4 in the Jimmy Connors Group.

Sinner has been the dominant force on indoor hard courts, with this his 27th victory in a row on the surface.

His serve was superb in a high-quality first set. He won 24 of 27 first-serve points, did not lose a single point behind his first serve and did not face a break point.

Auger-Aliassime took a set off Sinner during his run to the US Open final and hit hard from the off, rushing Sinner and occasionally matching him shot-for-shot.

But the injury at 6-5 30-0 up had an immediate impact, with Auger-Aliassime struggling to move and sending his shots long as he tried to hit his way out of trouble.

Sinner, who was taken to deuce just once in 10 service games, did not let up and sealed victory with an ace before being serenaded by his home crowd.

He and rival Alcaraz are in contention for the year-end number one ranking in Turin.

Sinner must defend his title – and hope Alcaraz loses a group match and does not reach the final – to retain the top ranking.

Alcaraz, in the opposite group to Sinner, began his campaign with a straight-set win over Alex de Minaur on Sunday.

Treasury Secretary Dr. Harshana Suriyapperuma yesterday declared that the economy has transitioned from crisis to stability and is now poised for sustained growth, driven by a 7% medium-term GDP target underpinned by six key strategies.

Speaking at the Daily FT-University of Colombo MBA Alumni Association and sponsored by Standard Chartered Bank with the creative partnership of Ogilvy Digital at ITC Ratnadipa, Colombo, he said the 2026 Budget was crafted after wide consultation with stakeholders to restore investor confidence, ensure transparency in public finance and build an economy capable of long-term, broad-based growth.

He noted that the country’s economic landscape has ‘stabilised significantly’ after years of turbulence, allowing the Finance Ministry to present ‘a confident, forward-looking Budget’ focused on governance, fiscal discipline and growth.

‘Instead of a country buried in corruption, there is governance. Instead of lawlessness, the rule of law is prevailing,’ he said, describing the 2026 Budget as one designed to ‘take the country to the next phase of growth.’

Dr. Suriyapperuma outlined six key strategies driving the Government’s medium-term vision which include; inclusive growth, export diversification, sustainability in policy, production economy, rural development and digital transformation.

‘These strategies converge to create the ecosystem for Sri Lanka to move from recovery to expansion,’ he added, reiterating the goal of achieving over 7% GDP growth in the medium to long term through consistent and coordinated policy action.

Highlighting a return of market confidence, Dr. Suriyapperuma pointed out that the reserves have strengthened even after reopening vehicle imports. ‘The move demonstrates the resilience of the market and confidence of businesses,’ he added.

The Treasury Secretary also cited the Colombo Stock Exchange’s record highs as a sign of renewed investor optimism. ‘The same shares that were sold at one-third the price two to three years ago, now trade three times higher, the difference is confidence,’ he observed, attributing this to fiscal prudence and adherence to financial discipline.

The Treasury, he said, has ensured that public finance regulations are enforced and that transparency has improved through publicly available frameworks like the Medium-Term Debt Management Strategy.

‘We are very confident about debt sustainability,’ he stressed, noting that foreign debt repayments began in 2024 and are continuing smoothly.

‘By 2028, Sri Lanka will be on a strong footing, having met its obligations through multilateral and bilateral arrangements,’ he expressed confidence.

Affirming the Government’s ‘zero tolerance for corruption’, Dr. Suriyapperuma said governance reforms have already begun delivering tangible outcomes. ‘For the first time, independent directors have been appointed to State-owned banks through an open, merit-based process managed by an external agency and vetted by an expert panel. This brings independence, accountability and professionalism into the management of State-Owned Enterprises (SOEs),’ he elaborated.

He also disclosed that the forthcoming SOE Holding Company Law will institutionalise this governance model, making SOEs more transparent and performance-driven.

The Treasury Secretary said several key legislative amendments and new acts are being prepared, with some to be presented to Parliament before year-end and others in early 2026. ‘These reforms are about unlocking SOEs’ full potential, providing accountability and ensuring they operate on par with the private sector,’ he noted.

Dr. Suriyapperuma reiterated that inclusive growth is the first of the six strategic pillars. The Government’s approach, he said aims to ensure that the benefits of growth reach beyond city limits through rural entrepreneurship support, women’s economic participation and social reintegration of vulnerable communities, including families affected by the drug crisis.

He also cited Budget allocations to education and connectivity, including investment in schools, universities and infrastructure to prepare future generations for the digital economy. ‘Children from Aswesuma beneficiary families at school and university age will be provided data access to explore knowledge and connect with the world, with safeguards,’ he said, describing it as a step toward building an ‘inclusive digital generation.’

Noting that digitisation is a cornerstone of the Budget, he said it is being fast-tracked through the Electronic National Identity Card (eNIC), expected to launch next year and the National Single Window system for trade facilitation.

He added that the Government is also implementing a three-stage digital invoicing system integrating businesses into a unified tax reporting framework. ‘Under the first phase exporters will be registered by end-2025, then in the second phase VAT-registered entities will be included and in the final phase comprehensive e-invoicing for all sectors,’ he said, confirming that testing for first phase has been successfully completed with strong private sector participation.

Dr. Suriyapperuma said to encourage small transactions and formalise the economy, the Government will absorb the cost of QR transactions under Rs. 5,000. Additionally, a $ 5 million Digital Innovation Fund has been allocated to accelerate investments in emerging tech and digital startups, aiming for 100% national high-speed digital coverage.

On taxation, the Treasury Secretary said the VAT threshold reduction was necessary to widen the tax base and formalise informal businesses. ‘VAT was being collected below the threshold illegally, so bringing them into the reporting culture is essential,’ he explained, noting that transition support will be provided to impacted SMEs.

He also stressed that tax consistency remains central to policy with ‘no major deviations’ have been made to rates or directions to ensure predictability for investors.

Dr. Suriyapperuma said major attention in the Budget is being given to roads, ports and domestic airports development and expansion, especially to support tourism expansion.

‘We expect the tourism sector to move into greater heights, with improved domestic airport infrastructure leading to higher occupancy in hotels, both in cities and outside,’ he said.

He said the country’s long-term vision extends beyond its 22 million population, focusing on integrating with global markets through new and restructured Free Trade Agreements (FTAs). ‘A dedicated team has been appointed to review existing FTAs and explore new opportunities,’ he confirmed.

Dr. Suriyapperuma ended his address on an optimistic note, asserting that the combination of fiscal discipline, structural reform, digital transformation and inclusive policy will enable Sri Lanka to rise again. ‘The vision is clear, the roadmap is real and implementation is already happening on the ground. With your support, collectively we will achieve 7% growth and ensure prosperity for all,’ he said.