Category: Daily Financial Times

Sri Lanka’s next phase of development should be measured not merely by economic indicators but by whether it creates opportunities for young people to build fulfilling lives in the country, University of Colombo Economic Students’ Association President Batya Peter said, offering a candid assessment of the aspirations and anxieties shaping a generation entering the workforce.

Speaking at the launch of the World Bank Group’s Sri Lanka Country Partnership Framework (CPF) 2026-2030 on Monday, Peter argued that employment, from a youth perspective, extends beyond earning an income and is inseparable from broader questions about long-term economic security and quality of life. Her perspectives were a curation of ideas and views shared by Colombo University students who engaged in extensive breakout sessions prior to the official public launch of the CPF.

‘Ultimately, what I’m trying to say is that this partnership framework shouldn’t just be about increasing the number. It’s about creating opportunities so that people can build the lives that they value in the country that they call home. So I really hope that that remains at the heart of the vision of the Country Partnership Framework,’ she said.

Her remarks offered policymakers, development partners and business leaders a window into how younger Sri Lankans are evaluating the country’s economic recovery and weighing decisions about whether to remain in the country or seek opportunities overseas.

Having recently completed her degree at the University of Toronto, Peter said many graduates view employment decisions through a broader lens than previous generations.

‘For many young people, getting a job is much more than just earning a salary,’ she said. ‘If you choose to work here, it means that you’re choosing to build a life here.’

She said questions around independent living, supporting ageing parents, home ownership and raising a family increasingly shape career choices and migration decisions.

Peter acknowledged that Sri Lanka had made significant progress in restoring macroeconomic stability since the 2022 crisis but cautioned that recovery remained fragile amid external shocks, climate risks and a rapidly changing global economy.

‘For young people like myself, stability is the foundation,’ she said, noting that confidence in institutions, economic resilience and future opportunities was essential if young people were to envision long-term futures in Sri Lanka.

A recurring theme in her presentation was that the debate on development should move beyond the quantity of jobs created towards the quality of employment opportunities available.

‘The challenge then is not only do we have enough jobs. It’s whether these jobs offer fair wages, opportunities for growth, and whether they align with our skills and aspirations,’ she said.

Peter identified several structural gaps that continue to constrain youth employment prospects.

Foremost among them was what she described as an ‘opportunity gap’, characterised by an insufficient supply of quality private sector jobs. While the public sector had historically served as a major employer, she argued that sustainable job creation would increasingly depend on private enterprise.

She also pointed to a persistent skills mismatch between university education and industry requirements, particularly affecting graduates from public higher education institutions who often complete lengthy academic programs with limited workplace exposure.

According to Peter, many graduates enter the labour market only to discover that the competencies sought by employers differ substantially from those acquired through formal education. She suggested greater collaboration between universities and industry, including curriculum development, internships and research partnerships, to bridge the gap.

Another challenge was an information deficit, with students often unaware of emerging career pathways and specialised opportunities beyond traditional professions.

‘There are a lot of niche areas within our sectors, and we’re just not aware of those jobs,’ she said, arguing that better visibility of opportunities could improve matching between skills and labour market demand.

Peter also highlighted concerns around job quality, including fair compensation, career progression, continuous learning opportunities, work-life balance and a sense of purpose in employment.

She noted that labour market barriers disproportionately affect women, citing low female labour force participation, inadequate childcare facilities and transport constraints as factors limiting workforce participation.

The presentation further underscored the need to foster a stronger culture of entrepreneurship and innovation. Peter said many young Sri Lankans remain highly risk-averse despite the growing opportunities created by digital technologies and changing business models.

She called for programs that reward innovation, expand access to mentorship and financing, and create a more supportive ecosystem for entrepreneurship.

Beyond labour market reforms, Peter urged policymakers to involve youth directly in the design and implementation of development initiatives.

‘Too often, decisions that affect youth are done by a few people behind closed doors,’ she said, arguing that youth participation would improve policy outcomes while fostering greater ownership of reform efforts.

She advocated moving young people from being passive beneficiaries of development programs to active contributors and co-creators of solutions.

Earlier, the World Bank Group Country Manager for Sri Lanka, Gevorg Sargsyan, said the CPF’s success would depend heavily on private sector participation and pledged that addressing youth aspirations would remain a central priority.

‘We are making it our priority,’ Sargsyan said, responding to concerns raised by students regarding employment and future opportunities.

(CPF) 2026-2030 aims to help sustain Sri Lanka’s economic recovery by supporting the Government’s goal of achieving more than 7% medium-term growth while creating quality private sector-led jobs.

Backed by up to $ 2 billion in financing and investments, the framework focuses on improving the business environment, expanding trade and exports, strengthening infrastructure and renewable energy, boosting employment in tourism and agriculture, particularly in underserved regions, and enhancing resilience to climate and economic shocks.

A central objective is to generate sufficient quality employment opportunities for the nearly one million young Sri Lankans expected to enter the labour market over the next decade

Forbes and Walker Tea Brokers Ltd., Sri Lanka’s largest tea broker, and Forbes and Walker Warehousing Ltd., a logistics and warehousing provider, have been awarded Carbon Neutral Certification by the Sri Lanka Climate Fund Ltd., reinforcing the group’s commitment to environmental stewardship, responsible business practices and sustainable value creation.

The certification recognises the successful quantification, verification and offsetting of the organisations’ greenhouse gas (GHG) emissions through the Forbes and Walker Rooftop Solar Project. It also reflects the Group’s efforts to reduce its environmental footprint while aligning with internationally recognised sustainability standards.

The achievement comes as global markets place increasing emphasis on sustainability and environmental compliance. Forbes and Walker said it remains committed to investing in initiatives that support climate action while delivering long-term value to stakeholders.

The certification also comes at a time when Sri Lankan exporters face increasingly stringent sustainability and environmental requirements in international markets, particularly in the European Union.

Recent regulatory developments covering packaging, waste management, green claims, recyclability and product sustainability are expected to have significant implications for exporters.

By adopting measurable sustainability practices, Forbes and Walker said it is better positioned to meet evolving regulatory requirements while strengthening its role within international supply chains.

As an intermediary between carbon neutral producers and buyers, the company said it helps extend sustainability practices across the supply chain, creating a pathway for responsibly produced tea.

Forbes and Walker said it remains focused on advancing initiatives that reduce emissions, promote renewable energy and support Sri Lanka’s transition towards a low-carbon economy.

With a dedicated workforce of over 9,000 employees across the island, Bank of Ceylon continues to drive Sri Lanka’s digital transformation by promoting QR payment solutions. Offering a fast, secure, and convenient way to make and receive payments, BOC Flex and Lanka QR empower customers and businesses to embrace cashless transactions with ease. Through this initiative, BOC is paving the way for a smarter and more digitally connected future.

The Government yesterday said approximately $ 6.9 million remitted by Sri Lankan workers in Israel has been suspended due to legal proceedings involving remittance service provider Global Remit, rejecting claims that the funds were lost as a result of a cyberattack.

Around 5,100 Sri Lankan workers have been affected by the suspension, Foreign Affairs and Foreign Employment Deputy Minister Arun Hemachandra told Parliament.

Responding to concerns raised in Parliament, Deputy Minister of Foreign Affairs and Foreign Employment Arun Hemachandra said claims that worker remittances had disappeared as a result of a hacker attack were ‘completely false’.

He explained that approximately $ 6.9 million in remittances had been suspended due to legal proceedings initiated by Israeli authorities against Global Remit.

According to the Deputy Minister, around 5,100 Sri Lankan workers have been affected by the suspension.

Hemachandra said the Government is engaged in discussions at both banking and diplomatic levels to resolve the matter and facilitate the release of the funds.

He added that alternative remittance channels have already been introduced to ensure Sri Lankan workers in Israel can continue sending money home without disruption.

The Deputy Minister also said the Government remains focused on strengthening the economy despite challenges arising from instability in the Middle East and climate-related pressures, including the effects of El Niño.

He further noted that ongoing tax reforms and the digitalisation of the tax system form part of broader efforts to improve state revenue collection, while measures are also being taken to reduce waste and corruption and direct public funds towards public benefit.

Sri Lanka’s leading exporters have endorsed the Government’s ambitious plan to boost exports to $ 36 billion by 2030, but warned that success will hinge on policy consistency, stronger global market access, supply chain reforms, and a decisive shift towards premium, value-added products rather than competing on volume.

Speaking at a panel discussion during the launch of the National Export Development Plan (NEDP) 2026-2030, Dilmah Ceylon Tea Company Chairman Dilhan C. Fernando and CEAT Kelani Holdings Ltd., Managing Director/CEO Ravi Dadlani outlined that Sri Lanka’s export future lies in leveraging quality, sustainability, and innovation rather than attempting to emulate manufacturing giants such as Vietnam and India.

Fernando said the country already possesses most of the ingredients required to achieve the NEDP’s ambitious export targets, but stressed that Sri Lanka must build its strategy around its unique strengths.

‘Sri Lanka must recognise that its competitive advantage is different from countries such as Vietnam. Our focus should be on value rather than volume,’ he said.

He pointed to products such as Ceylon Tea, Ceylon Cinnamon, and Ceylon Cashew, arguing that the country’s export success will depend on premium positioning, branding, and quality differentiation rather than price competition.

‘In the US market, Sri Lanka cannot compete with cassia on price. However, authentic Ceylon Cinnamon has unique characteristics that can command a premium if properly marketed and protected,’ Fernando said.

He warned that achieving such positioning would require significant investment in testing facilities, certification systems, and quality infrastructure, noting that many exporters still incur substantial costs by sending samples overseas for advanced testing.

Fernando also highlighted growing risks from evolving European regulations, insisting Sri Lankan exporters must rapidly strengthen traceability, sustainability, and responsible sourcing systems to maintain market access.

‘The EU’s evolving regulatory framework increasingly requires exporters to demonstrate sustainability, traceability, and responsible sourcing throughout their supply chains,’ he said.

He called for targeted support programs to help businesses comply with emerging standards, particularly in agriculture, where climate resilience and traceability are becoming prerequisites for accessing premium markets.

Meanwhile, Dadlani cautioned against direct comparisons with regional competitors, arguing that Sri Lanka’s challenge is fundamentally different due to the smaller scale of its economy.

‘Comparing Sri Lanka directly with Vietnam or India is difficult because the scale of those economies is vastly different,’ he said.

However, he welcomed the NEDP’s emphasis on expanding beyond traditional export sectors, describing diversification as critical to sustaining long-term growth.

For Dadlani, the biggest determinant of success will be whether the Government can maintain policy stability over several years.

‘The strategy is sound, but its success depends on maintaining policy stability over the next four to five years,’ he said.

He cited CEAT’s post-crisis investments in Sri Lanka as evidence that investor confidence remains intact despite global uncertainties and domestic economic challenges.

‘From our own experience, confidence in Sri Lanka remains strong. One of the largest post-crisis investments in the manufacturing sector came from India, with significant investment in new facilities. This demonstrates that investors continue to see opportunities in Sri Lanka despite global challenges,’ he added.

At the same time, Dadlani warned that weaknesses in domestic supply chains could constrain future growth, pointing specifically to the decline in Sri Lanka’s rubber production, which has forced manufacturers to depend increasingly on imported raw materials.

‘This is an area where coordinated support from institutions and policymakers will be crucial,’ he said.

Both business leaders also pointed to deeper structural reforms needed to support export expansion.

Fernando argued that exporters, particularly small and medium enterprises (SMEs), continue to face excessive bureaucracy and fragmented institutional support.

‘Exporting should not be a process that requires entrepreneurs to navigate multiple institutions and bureaucratic hurdles,’ he said.

He also called for stronger links between universities, research institutions, and industry, noting innovation and commercialisation remain underdeveloped despite Sri Lanka possessing significant research capabilities.

Fernando highlighted Sri Lanka’s limited network of trade agreements as a major disadvantage compared with competitors such as Vietnam.

‘Compared with countries such as Vietnam, Sri Lanka has far fewer free trade agreements. Expanding preferential market access is essential if we are serious about achieving export diversification and value addition,’ he said.

They also said success should be measured not only by export earnings, but by the transformation of the economy itself.

Dadlani said he would view the NEDP as successful if it attracts substantial investment into new export industries, while delivering measurable progress on policy commitments.

Fernando, meanwhile, said Sri Lanka has an opportunity to turn rising global sustainability standards into a competitive advantage.

‘If our exports can successfully position themselves around quality, traceability, geographical indications, and sustainability, then we can achieve premium market positioning and long-term growth,’ he said.

The Government yesterday withdrew plans to lower the Value Added Tax (VAT) registration and Social Security Contribution Levy (SSCL) thresholds, sparing thousands of small and medium-sized enterprises from being brought into the tax net at a time when businesses are grappling with the economic consequences of Cyclone Ditwah and the conflict in the Middle East.

Opening the second reading debate on the Value Added Tax (Amendment) Bill and other changes, Economic Development Deputy Minister Nishantha Jayaweera announced that the Government would retain the existing Rs. 60 million annual turnover threshold instead of proceeding with the reduction to Rs. 36 million proposed in the 2026 Budget.

The intension was net 10,000 businesses into the tax base.

‘The economic recovery was beset by unforeseen events out of our control, Cyclone Ditwah and the Middle East war, which have negatively impacted businesses particularly SMEs who are facing considerable challenges,’ Jayaweera told Parliament.

He said President and Finance Minister Anura Kumara Dissanayake and the Cabinet had decided against proceeding with the reduction, citing concerns that it would place additional pressure on smaller enterprises already facing difficult trading conditions.

The reversal means businesses with annual turnover between Rs. 36 million and Rs. 60 million will remain outside the VAT net. The measure had originally been intended to broaden the tax base and strengthen revenue mobilisation, a key objective of the Government’s fiscal reform agenda.

Jayaweera argued that the Government had already achieved significant improvements in tax compliance without altering the threshold.

According to him, the number of VAT files has increased from around 18,000 when the National People’s Power administration assumed office to more than 35,000 currently, with much of the growth coming through voluntary registration.

He encouraged businesses below the threshold to register voluntarily, arguing that VAT registration enables firms to recover input taxes paid to suppliers while facilitating transactions with larger businesses that require VAT documentation.

The Government, he said, remained committed to expanding the tax base over time as part of a broader effort to create a simpler and more credible tax system capable of supporting lower rates in the future.

The announcement of suspending the VAT threshold reduction was met with raucous protest from the Opposition ranks.

Committee on Public Finance (CoPF) Chairman Dr. Harsha de Silva objected that Parliament was being asked to debate provisions that differed materially from those previously considered by the committee.

‘You are now bringing something different to Parliament which goes against the established traditions of this House,’ he said.

De Silva stressed that he was not opposing the decision to retain the higher threshold. Rather, he argued that changes to legislation examined by CoPF should be referred back to the committee before being taken up by Parliament.

‘If you wish to proceed, then suspend the Standing Orders and present a separate motion. If not, why have CoPF and other committees? You might as well do away with them,’ he said.

The intervention prompted a sharp response from Government MP Lakmali Hemachandra, who challenged what she characterised as an expansive interpretation of CoPF’s authority.

Hemachandra argued that Parliamentary committees are empowered to scrutinise and make recommendations, but do not possess approval powers over legislation or Government policy.

‘There is no standing order saying that the Public Finance Committee has to approve any motion coming to Parliament. There is no such standing order saying that the Public Finance Committee has to approve,’ she said.

She maintained that while CoPF plays an important oversight role, the authority to approve or reject legislative proposals ultimately rests with Parliament itself.

‘The Public Finance Committee can make recommendations. The Chairman of the Committee can very well make recommendations, but there is no requirement of approval. Parliament is a body with public finance control. Parliament will approve. If Parliament approves, it will go forward,’ Hemachandra said.

When de Silva argued that her position undermined Parliamentary traditions, Hemachandra rejected the suggestion and insisted she was not questioning the relevance of Parliamentary committees.

‘I am not saying that the Public Finance Committee has nothing to do in Parliament. Any committee in Parliament can make recommendations, but the power to approve lies with Parliament. The Committee cannot approve or disapprove anything that comes into Parliament,’ she said.

Hemachandra further challenged Dr. de Silva’s interpretation of the Standing Orders, arguing that no provision exists requiring committee approval before legislation can proceed to the House.

The exchange exposed differing interpretations of CoPF’s role in the legislative process, particularly when Government amendments diverge from proposals previously examined by the committee.

Speaking again later, MP Hemachandra charged that the various Parliamentary committees, especially a few of its prominent members, cannot be allowed to usurp the rights of 225 members of the legislature. ‘If it was done so because of tradition, as the CoPF Chairman stated, then this has to change,’ she quipped.

Dr. de Silva attributed the Government’s decision to suspend the VAT threshold reduction to pressure brought on by the Opposition on behalf of the people. He said the Opposition was not against widening the tax base, but did not agree to burdening small businesses already fighting for survival. ‘This is a win for the Opposition, through whom people spoke,’ he said.

Lee Hedges PLC has revised the payment structure for its previously approved acquisition of the entire issued share capital of Lanka Realty Developments Ltd. (LRD), a transaction valued at Rs. 3.16 billion.

In a disclosure to the Colombo Stock Exchange, the company said its Board approved new payment terms on 19 June in respect of the acquisition of 112.17 million ordinary shares of LRD from Lanka Realty Investments PLC (LRI) and Eighth Wonder. The transaction had previously been disclosed on 20 March and approved by shareholders via a special resolution on 28 April.

Under the revised arrangement, Lee Hedges will make an initial payment of Rs. 1.1 billion at or prior to execution of the share transfer, with the balance Rs. 2.06 billion payable within six months. The deferred amount will carry interest at the Average Weighted Prime Lending Rate plus 1.5% per annum until settlement in full.

The acquisition comprises the purchase of 57.2 million ordinary shares, representing 51% of LRD, from LRI for Rs. 1.61 billion and 54.96 million ordinary shares, representing the remaining 49%, from Eighth Wonder for Rs. 1.55 billion. Upon completion, Lee Hedges will own 100% of LRD.

The company said a Sale and Purchase Agreement reflecting the revised terms was entered into by Lee Hedges, LRI and Eighth Wonder on 19 June. Following execution of the agreement and receipt of the initial payment, the vendors transferred their shareholdings in LRD to Lee Hedges on the same date.

Lee Hedges further disclosed that the Board of LRI approved the variation of payment terms on 18 June, while the company’s Related Party Transactions Review Committee reviewed and recommended the revised arrangement.

As forecasted, the unsuspecting Saints walked into a bed of Landmines, camouflaged by the beautiful lush green turf of the Sugathadasa Stadium, and as predicted, the enchanting wizardry was at work throughout the game, revealing previously unseen spells of perfectly crafted cross-kick Tries, surprise back hand passes, and the amusement of mid-field Mauls springing following restart kicks, etc. Thus, Joes had to deal with more than what they had planned for, which resulted in a hard tussle for points, every step of the way.

Luckily, both sides had managed to eliminate their lineout problems in this game, which presented them fair chances of attacking with their Mauls, and getting close to their respective finish lines, although no Maul Tries were scored. Since it was a neck-to-neck contest throughout, it makes no sense to analyse the two halves separately.

The stout Tankers rammed the pedal to the metal in order to become an eligible elite member of the Super-League above the current League, by matching up to the standards of the ‘invincible’ Lions, making them twirl, turn, wiggle and break immense sweat of discomfort, before going down like the fallen heroes of D-Day in WWII. They were warmly received post-match by the ecstatic Zahira proponents with loud cheering, at the backdrop of confetti showering down and decorating the orange skies with colours of their Alma Mater.

Our prophecy that was professed when we kicked off the League with the Teaser Preview titled ‘Trinity leads charge in redefining Schools Rugby’, was fulfilled by Trinity, by being responsible for creating a monster that reflects their symmetrical mirror image, as the Tankers mimicked the Lion King’s every skill, every move and every tactic, that prevents oppositions from executing their pre-planned actions to perfection, if not prevent them altogether. Moreover, their ability to manufacture Tries at will from thin air against the calibre of Trinity, left the latter’s followers dumbfounded, as the rest raved in ecstasy.

The pressure situation at Maradana was immense and somewhat similar to the base of the Mariana Trench, yet it seldom affected the ball handling of either team, as 4 and 5 errors in such a tense brawl is excellent by any standards. However, human emotions were at the peak of Mount Everest, which led to an unusual number of other mistakes by both sides, particularly penalties. Our prediction with regard to Trinity’s 5 lineout losses was close, as they lost 4 altogether including a proper turnover by Zahira. However, our prediction that Trinity would force 4 knock-ons was made completely incorrect by the Zahirian coaching unit in reading, which can be perceived as one of the positives of the existence of this column. In fact, Zahira knocked-on just once in this game, and all the other 3 were forward passes.

ICC Chairman Jay Shah who met with the President of Sri Lanka Anura Kumara Dissanayake on a recent visit to Colombo shared his views with his meeting with the President in a social media post X on Friday.

‘It was a privilege to meet His Excellency President @anuradisanayake today and discuss the current status of cricket in Sri Lanka. Our discussions focused on increasing opportunities for emerging players, supporting grassroots and youth development programmes, and leveraging cricket as a vehicle for social impact and economic growth. ‘We also exchanged views on the role Sri Lanka continues to play in hosting major international events and contributing to the global development of our sport. Sri Lanka holds a special place in the history of cricket, and I look forward to working closely with all stakeholders to further strengthen the game and create new opportunities for future generations.

My sincere thanks to His Excellency for his time and unwavering support for cricket,’ Jay Shah posted on X.

The recent easing of tensions involving the United States, Iran, and Israel has brought welcome relief to global energy markets. Earlier fears of disruptions to Middle Eastern oil supplies and critical shipping routes had pushed crude prices higher, raising concerns across import-dependent economies. As those fears recede, oil prices have fallen from recent peaks, offering a timely economic reprieve for countries such as Sri Lanka.

For Sri Lanka, the significance extends beyond cheaper fuel. At a time when the country is still navigating a fragile post-crisis recovery, lower oil prices provide an unexpected external tailwind. The real question is whether this temporary advantage can be transformed into lasting economic resilience.

Sri Lanka›s economic fortunes remain closely tied to global energy markets. Unlike oil-producing nations that benefit from rising crude prices, Sri Lanka imports almost all of its petroleum requirements. Fuel costs influence transportation, logistics, manufacturing, electricity generation, and ultimately the cost of living. Every increase in oil prices raises demand for foreign exchange, places pressure on the balance of payments, and risks fuelling inflation.

The experience of 2022 remains a powerful reminder of this vulnerability. Fuel shortages, long queues, and a severe foreign exchange crisis exposed the extent to which external shocks can destabilise the economy. Although significant progress has been made since then, Sri Lanka›s dependence on imported energy remains largely unchanged.

This is why the recent decline in oil prices matters.

Unlike fiscal stimulus, which often requires additional borrowing, or monetary easing, which can carry inflationary risks, lower oil prices improve economic conditions without requiring policy intervention. A reduced fuel import bill means lower foreign exchange outflows, stronger external balances, and less pressure on the rupee. It also helps contain imported inflation, benefiting households and businesses alike.

The gains extend across the economy. Manufacturers benefit from lower production costs, transport operators face reduced fuel expenses, and sectors such as tourism, aviation, and logistics enjoy improved operating margins. Agriculture, too, benefits from lower distribution and fuel costs. Collectively, these developments strengthen economic activity at a crucial stage of recovery.

Perhaps the most important benefit lies in the area that matters most for Sri Lanka›s long-term stability: external resilience.

The 2022 crisis was fundamentally a balance-of-payments crisis. The country simply ran out of sufficient foreign exchange to finance imports and meet external obligations. While debt restructuring and IMF-supported reforms have improved the outlook, maintaining adequate foreign exchange reserves remains critical.

Lower oil prices directly support this objective by reducing import costs and creating opportunities to rebuild reserves. Stronger reserves improve confidence, enhance the country›s ability to withstand future shocks, and provide policymakers with greater room to manoeuvre during periods of global uncertainty.

Yet many consumers may wonder why falling global oil prices do not always translate immediately into lower living costs.

Structure of domestic energy pricing

The answer lies in the structure of domestic energy pricing. Retail fuel prices are influenced not only by international crude markets but also by exchange rate movements, taxation, distribution costs, and the financial position of state-owned enterprises. Electricity tariffs are even more complex.

As energy experts, including Sri Lanka Energy Managers Association President Dr. Amila Wickramasinghe, have pointed out, fuel prices can be adjusted relatively quickly. Electricity tariffs, however, are shaped by broader operational, fiscal, and political considerations. As a result, the benefits of lower oil prices may take time to filter through to households and businesses.

Sri Lanka’s electricity sector also remains structurally vulnerable to fuel price fluctuations. During periods of low hydropower generation, thermal power assumes a larger role in electricity production. When fuel prices rise, generation costs increase sharply. Lower oil prices provide temporary relief, but they do not resolve the underlying inefficiencies and vulnerabilities within the power sector.

This brings us to the larger policy question: has Sri Lanka become more resilient, or is it simply enjoying a favourable moment?

Energy markets remain among the most geopolitically sensitive sectors of the global economy. Renewed tensions in the Middle East, disruptions to shipping routes, or unexpected supply constraints could quickly reverse recent price declines. Sri Lanka has not been insulated from these risks; rather, it has been granted a temporary breathing space.

The challenge now is to use that breathing space wisely.

Renewable energy development

Accelerating renewable energy development should remain a national priority. Sri Lanka possesses considerable solar and wind potential, yet much of it remains underutilised. Reducing dependence on imported fossil fuels is not merely an environmental objective; it is an economic necessity.

At the same time, continued investment in grid modernisation, power sector efficiency, and energy infrastructure will be essential. Foreign exchange reserves must continue to be rebuilt during periods of favourable external conditions, while fiscal and monetary discipline should not be relaxed simply because short-term pressures have eased. Expanding and diversifying export earnings remains equally important if Sri Lanka is to reduce its exposure to external shocks.

The recent decline in oil prices has undoubtedly improved Sri Lanka›s near-term economic outlook. It eases pressure on reserves, supports price stability, and creates a more favourable environment for business activity and growth.

However, it would be a mistake to view this as a permanent shift. Oil markets remain volatile, geopolitical risks remain present, and many of the structural weaknesses that contributed to Sri Lanka›s crisis have yet to be fully addressed.

Sri Lanka has been handed a temporary geopolitical dividend. Whether it becomes a lasting economic gain will depend not on global oil markets but on the country›s ability to strengthen its economic foundations before the next external shock arrives.

Lower oil prices offer welcome relief. They should also serve as a reminder that true economic security lies not in favourable geopolitics, but in reducing the vulnerabilities that make such developments so consequential in the first place.