Category: Daily Financial Times

CR and FC produced a commanding all-round performance to outclass Air Force SC 38/5 in their Inter-Club Rugby League encounter under lights at Longdon Place on Saturday.

At the short breather, the Reds led 19/5.

CR’s dominance was reflected in a six-try blitz, with Chemod Muthunayake opening the scoring before Fijian Saufa Billivanua crossed twice in a powerful display out wide. Omalka Gunaratne, Vishenka Silva, and Naveen Marasinghe added further tries as CR repeatedly breached the Air Force defensive line with structured phase play and sharp backline movements. Fly-half Mursheed Doray was in assured form, slotting over four conversions to keep the scoreboard ticking.

Air Force could respond only through a solitary try by Shamika Kaushan, but struggled to contain CR’s relentless attacking pressure and disciplined defence. The result confirms Air Force’s place in the Plate segment for Round Two, while CR and FC remain firmly in the Cup race, with CH also expected to feature among the top contenders.

For the Reds, this emphatic victory keeps them on top of the points table for yet another week and strengthens their bid to regain the League crown. With momentum building, depth across the squad, and a balanced mix of power and pace, the Reds are shaping up as genuine title favourites as the competition heads into its decisive phase. (SJ)

Worldlink Shipping Colombo Owner and Managing Director Vera Wickramasinghe last week swept the Women’s Chamber of Industry and Commerce (WCIC) Prathibhabhisheka Women Entrepreneur Awards 2025, at which Prime Minister Dr. Harini Amarasuriya was the Chief Guest.

She emerged as the Woman Entrepreneur of the Year 2025 in addition to clinching The Woman Entrepreneur – SAARC Region 2025. Additionally, she also won the Gold Award for the Large Category and Gold for Western Province.

Worldlink Shipping Colombo is a shipping, Non-Vessel Operating Common Carrier (NVOCC), and freight forwarding organisation engaged in business since August 1997. It represents many leading principals and networks worldwide.

Wickramasinghe is also Director/Secretary of Freight Forwarder Network (FFN), a unique global community of carefully chosen freight forwarders coming together to connect and collaborate within the logistics industry.

The prestigious economist and Central Bank’s former Economic Research Director, Dr Nimal Sanderatne has ventured into exploring issues relating to development in the form of a compressed thesis titled ‘Development Not By Economics Alone: Non-Economic Factors in Development’ [1] published by the Gamani Corea Foundation of which he had been a former Chairman. His latest publication challenges readers to revisit the concept of development which has become an issue not only for development policymakers but also for philosophers and social reformers.

Writing a foreword to the Sanderatne thesis, Sri Lanka’s veteran development planner cum founder of the non-state sector economic think tank, Marga Institute, Dr Godfrey Gunatilleke, qualifies Sanderatne’s work as follows: ‘Sanderatne is writing the book as an economist, keeping in mind the proclivity in his own discipline to give primacy to the economic component when dealing with development. He therefore takes pains to correct this bias. He does this with a fine scholarly restraint without any undue derogation of the economic factor. What he seeks to emphasise throughout the book is that each of the different components of development, economic and non-economic, has an autonomous existence and processes (of) its own independent value, contributing to the total wellbeing of the individual’ [2].

Thus, Sanderatne has presented to us the concept of development from a holistic point, deviating from the more recent treatment of the subject purely as an economic phenomenon. The purpose of his treatise has been to identify the so called non-economic factors – social, political, cultural, environmental and so on – that contribute to the well-being of people as individuals and as members of society.

Cover of ‘Development Not By Economics Alone: Non-Economic Factors in Development’ authored by Dr. Nimal Sandaratne

Kautilya: Final goal of living is self-perfection

In my view, the dichotomy created in the analysis of the well-being of people as economic and non-economic is a recent development. About 2300 years ago, the Indian Sage Chanakya, writing under the pen name Kautilya, presented to us the oldest but still surviving treatise of economics titled ‘The Arthashastra’ or the Science of Economics [3]. The Arthashastra is a textbook prepared for educating the prospective rulers in the fine arts and the science of statecraft. There is evidence that rulers even in a far island like Sri Lanka had been trained in statecraft by using the philosophy of Chanakya. For instance, Chulavansa, Part II of the Great Chronicle Mahavansa reports that King Parakramabahu I who ruled Sri Lanka from Polonnaruwa as the seat of administration in the 12th century CE had been well equipped with ‘the power of the wisdom of Chanakya’ when he was being trained as the future ruler of the country [4].

According to the treatment of the subject in the Arthashastra, the science of economics in ancient times included not only the subject which we learn as economics, but also politics, religion, culture, social sciences, international relations, public finance, human resource development, warfare, internal and external trade, and justice and punishment, to mention but a few. Kautilya says that the final goal of a person as an individual or as a member of society is to attain Moksha or self-perfection [5].

There are three pillars in society that will help a person or society to reach self-perfection. They are Dhamma or a moral code, Artha or provision of material goods and services, and Kama or living a happy and fruitful householder life that includes the rearing of children as worthwhile citizens of society. Though all these three pillars are equally vital for the sustenance of society, Kautilya has further elaborated on the role of the Artha or the economic side of the pillars in human development.

Says Kautilya: ‘The root of wealth is economic activity and lack of it brings material distress. In the absence of fruitful economic activity, both current prosperity and future growth are in danger of destruction’ [6]. Therefore, it is the duty of the king, or in the present-day, the State, to promote the welfare of his people since it helps him augment his power, since power comes from the countryside which is the source of all economic activity [7]. Thus, in ancient times what had prevailed in society had been a holistic treatment of the well-being of people. In modern times, economic Gurus and policymakers have tended to ignore this vital aspect of prospering human societies. Sanderatne’s present work is a revisit to this important requirement.

Long conviction of need for holistic approach

Sanderatne says that the present work is the outcome of his long conviction as a professional economist – in my view it spans for over six decades – that development should be approached from a holistic point considering economic as well as non-economic factors.

Says Sanderatne: ‘Therefore, for quite some time, my perspective has been one of attempting to understand economic problems as social issues with many non-economic dimensions. This book is the result of that way of thinking. My approach has been as a social scientist rather than an economist. This led me to study a number of issues that were an extension of economics. The political economy of agrarian change, the impact of demography on development, and education as a key factor in social change are among these explorations. This book reflects these interests of mine within the framework of thinking that economic growth and development cannot be achieved by economics alone’ [8].

He, thus, goes onto present the preconditions that are needed for rapid development. For that, a country should undergo cultural, political, and social transformation, providing the factors conducive for development to take place. Any country that fails to attain this conducive transformation, according to Sanderatne, will be eternally grappling with the issue of attaining development. An exception is Singapore which was able to implement the needed transformation under the visionary leadership of its founding Prime Minister, Lee Kuan Yew. This visionary leadership is a non-economic factor contributing to development and even in Kautilya’s Arthashastra that responsibility was assigned to the king.

Sanderatne’s argument is that even the economic factors that contribute to economic development like efficiency of factors of production or quality of investment are dependent on cultural, political, and institutional factors. They are necessary preconditions for development and in the absence of these preconditions, it is unlikely that a country can foster rapid economic development. According to Sanderatne, cultural factors help economic development on two counts

Necessary prerequisites of development

Sanderatne, then, goes onto explain those non-economic factors that contribute to economic development. Sanderatne’s argument is that even the economic factors that contribute to economic development like efficiency of factors of production or quality of investment are dependent on cultural, political, and institutional factors. They are necessary preconditions for development and in the absence of these preconditions, it is unlikely that a country can foster rapid economic development. According to Sanderatne, cultural factors help economic development on two counts.

First, they stimulate the economic factors. Second, they influence even the determination of the size of these economic factors making them more productive. He has defined the cultural factors as attitudinal, social, cultural, religious, political, educational, administrative, legal, and institutional phenomena that are conducive for economic development.

Colour of the cat issue

Cultivating correct attitudes in people to work, save, invest, invent, innovate, compete etc. are as important as instilling in them technology, and work skills. Sanderatne says that attitude toward work, work ethics, punctuality, honesty, social cohesion, and modes of thinking determine key economic prerequisites for development. If they are in the right direction, they are helpful to development. If they are not, they are inimical to development. In this context, he has hailed the need for adopting a pragmatic approach to opinion making thereby shedding hard-held dogmatic views.

An example he has quoted is the shedding of socialistic dogmas by both China and Vietnam for the sake of rapid economic advancement. He has attributed a saying that ‘do not care whether a cat is black or white, as long as it catches mice’ to Chinese Premier Xi Jinping. But as quoted by Daniel Yergin and Jospeh Stanislaw in ‘The Commanding Heights’, it had been made by China’s reformist leader Deng Xiaoping when he transformed China from communism to State capitalism in 1979 [9]. But this statement is eternal since it is an attack on dogmatic addictions that stunt growth momentum.

State sector bribery and corruption

Sanderatne has drawn our attention to the incidence of bribery and corruption in the public sector as a deterrent to economic development. Says Sanderatne: ‘Bribery and corruption in the public services is another serious impediment to development. The notion that corruption lubricates economic growth has been jettisoned, and the widely held view today is that it is a significant deterrent to development. Bribery and corruption, inter alia, distorts public decision making; increases the cost of the public projects, especially the large ones like infrastructure; compromises on the quality of public projects; increases the private sector costs; and is a disincentive to foreign investment. Levels of corruption have to be reduced drastically to provide an environment conducive to proper decision making, efficient project implementation, and to attract foreign direct investment’ [10].

Sanderatne has presented to us the concept of development from a holistic point, deviating from the more recent treatment of the subject purely as an economic phenomenon. The purpose of his treatise has been to identify the so called non-economic factors – social, political, cultural, environmental and so on – that contribute to the well-being of people as individuals and as members of society

Importance of private sector bribery and corruption

Though Sanderatne has referred only to public sector bribery and corruption, it is now widely held that private sector bribery and corruption, also called private to private corruption, are also a significant problem for rapid economic growth with its severe economic and social consequences. A report issued by the UN Office on Drugs and Crime under the title ‘Knowledge Tools for Academics and Professionals’ has noted that the occurrence of private sector corruption is also high [11]. Private corruption affects the entire supply chain, as it distorts markets, undermines competition, and increases costs of firms. It is a serious problem for the well-being of societies since it prevents a fair and efficient private sector, reduces the quality of products and services, and leads to missed business opportunities. In this connection, although Sri Lanka’s new bribery and corruption laws have included private sector bribery and corruption too as punishable offences, a report published by Sri Lanka’s non-state sector think tank Verite Research, in 2025 has identified nine key gaps in the country’s legal framework compared to best practices recommended by UN Convention Against Corruption or UNCAC [12]. Hence, it is necessary that Sri Lanka’s legal system should be strengthened to address these issues if the absence of bribery and corruption is to stimulate economic development of the country.

Although Sri Lanka’s new bribery and corruption laws have included private sector bribery and corruption too as punishable offences, a report published by Sri Lanka’s non-state sector think tank Verite Research, in 2025 has identified nine key gaps in the country’s legal framework compared to best practices recommended by UN Convention Against Corruption or UNCAC. Hence, it is necessary that Sri Lanka’s legal system should be strengthened to address these issues if the absence of bribery and corruption is to stimulate economic development of the country

Need for changing attitudes and values

Commenting on Sri Lanka’s attitudinal and value systems that hinder economic development, Sanderatne has emphasised that there is an urgent need for transforming these values to usher economic development.

Says Sanderatne: ‘The excessive politicisation of society and its divisive character are detrimental to economic growth and have to be addressed. A more national outlook with long-term perspectives should replace the current partisan, individualistic, and short-term approaches to fundamental issues. Both the Government and the people have to be more pragmatic. We should look to future gains rather than indulge in incessant debate about the past. Economic policies must be formulated in relation to current domestic conditions and a realistic appraisal of the global situation. A new work ethic must emerge to enhance labour productivity, and at the same time, more incentive-oriented management systems that ensure greater sharing of gains between owners, management, and employees must be worked out. Employment policies that are flexible must be instituted to enable private enterprises to take risks as well as enforce discipline’ [13].

Unproductive debate over education reforms

This is a fine advice to Sri Lankan people, their political leaders, businessmen and civil society activists. They should learn how to debate and what to debate. This should not be an offending suggestion to Sri Lankans, the majority who follow the preaching of the Buddha. Emperor Asoka who was responsible for transmitting the teachings of the Buddha to Sri Lankans some 2300 years ago had advised in one of the Rock Edicts that if criticism is needed it should be done in a mild way, always honouring the opponent [14].

A pertinent example is the educational reforms being proposed by the present Government. The Government has failed to communicate its program well to people who have also failed to apprise them in the correct perspective. As a result, as Sanderatne has observed, Sri Lankans have been engaged in unproductive debate, postponing the issue of education to the future. Above all, criticisms by both the advocates from the Government side and the opponents to education reforms have not been mild at all. This is only one example, and it is typical of Sri Lankans’ bad attitudes and values.

Sanderatne should be commended for publishing this book for the country’s readers.

Vallibel Finance PLC has announced plans to raise approximately Rs. 2.12 billion through a Rights Issue of new ordinary voting shares, as the licenced finance company moves to strengthen its Tier I capital base in line with regulatory requirements and its expansion plans.

Vallibel Finance said its Board of Directors resolved on 9 January to increase the company’s stated capital via a Rights Issue of 29,431,675 new ordinary voting shares, priced at Rs. 72 per share.

The Rights Issue will be offered on the basis of one new ordinary voting share for every eight existing ordinary voting shares held by shareholders on the date of entitlement.

The company’s current stated capital stands at over Rs. 1.3 billion.

Vallibel Finance said the proceeds of the issue will be used to strengthen its Tier I capital base in line with business expansion, while ensuring continued compliance with capital adequacy requirements stipulated by the Central Bank of Sri Lanka (CBSL).

The company said the proposed Rights Issue has received approval from the CBSL by a letter dated 16 January 2026.

Vallibel Finance shares closed Friday Rs. 0.50 lower at Rs. 105.50. The company reported net assets of Rs. 68.72 a share as of end-September 2025. Vallibel Investments Ltd., was the top shareholder with a 51.44% stake, followed by Dhammika Perera with 21.43%. The public shareholding was 21.27%.

Kandy Sports Club produced a good team performance to overpower Havelock Sports Club in a six-try blitz, sealing second place on the points table with a 36-26 victory in front of a packed Nittawela Rugby Stadium yesterday.

Although Havies showed flashes of resistance, Kandy’s control, pace, and clinical finishing proved decisive in their final home game before the Super Round finals.

At the short breather, the defending champions had already laid a strong foundation, leading 19-7 after dominating territory and possession. Their ability to convert pressure into points set the tone for the remainder of the contest. Havies almost gave up the game 15 minutes in the earlier half but settled later after conceding two tries to Kandy.

Kandy dictated proceedings superbly through their three-quarter line, which looked sharp and dangerous throughout. Dinal Ekanayake, Akash Madushanka, and Srinath Sooriyabandara were outstanding in open play, repeatedly breaking the defensive line. Among the forwards, Dilshan Fareed and Dahan Wickramarachchi stood out with strong carries and tireless work at the breakdown.

Havelock SC played well in patches and briefly threatened to turn the game around when they narrowed the margin to a single try. However, Kandy showed composure under pressure and finished strongly to secure a well-earned bonus-point victory. Havies failed to start early, plus did not finish their moves. Azmir Fajudeen, Abdullah Faiz, and Jayathu Rajarathna had a good outing.

Kandy drew first blood in the opening minute when scrum-half Heshan Jansen sniped through for an early try. Hirusha Sampath took over kicking duties but failed to convert. The hosts struck again through a sweeping backline movement that ended with Dinal Ekanayake scoring, with Sampath adding the extras.

Havelock responded after Samuel Maduwantha missed a 40-metre penalty, as Abdullah Faiz crossed for their first try after coming from seeing Yellow, which Maduwantha converted. Kandy, however, had the final say in the half when Ekanayake touched down for his second try just before the break.

After the turnaround, the introduction of Mohamed Rifan added tempo to the Havelock backline. Samoan centre Amituanai Visesio crossed the line, with Maduwantha converting to reduce the deficit.

Kandy responded emphatically with back-to-back tries from Dilshan Fareed and Sooriyabandara. Havies refused to go away, replying with two well-worked forward tries by Azmir Fajudeen to close the score to 31-26.

A defining moment came when Kandy winger Ekanayake produced a superb tackle on Maduwantha near the line, forcing a crucial knock-on. Kandy maintained pressure, and another sweeping three-quarter move saw Sampath score the final try to seal the 36-26 victory.

Referee Raveen Alexander handled proceedings well in an entertaining, high-intensity contest.

In another Inter-Club game, CH and FC outclassed Sri Lions 59/12 at Longdon Place.

Mastercard has joined as the Strategic Partner for the Association of Professional Bankers (APB) 36th Anniversary Convention, marking a key milestone in APB’s journey toward stronger global engagement. The cheque handover signifies this strategic collaboration for the Convention themed ‘Navigating Complexity and Accelerating Impact through Regional Synergy.’

Scheduled for 19-20 February at Cinnamon Life, Colombo, the Convention will elevate APB onto a global platform, bringing together international participants and subject-matter experts from multiple countries. This partnership with Mastercard underscores APB’s commitment to advancing the banking profession, strengthening regional collaboration, and promoting international thought leadership.

The Women’s Chamber of Industry and Commerce (WCIC) Prathibhabhisheka Women Entrepreneur Awards (WEA) 2025, held last week, celebrated forerunners that contribute as women-owned/women-led businesses in Sri Lanka.

The WCIC Prathibhabhisheka Women Entrepreneur Awards is a flagship event organised annually by the WCIC as the national chamber for women in business to honour women entrepreneurs for their tenacity and vigour to drive businesses that contribute to the Sri Lanka economy. The awards were open to women entrepreneurs across Sri Lanka and also the SAARC region, with a focus on strategic business growth, finance, and governance.

The event was graced by distinguished guests, including Chief Guest Prime Minister Dr. Harini Amarasuriya, alongside valued partners, members of the WCIC, other well-wishers, award winners, and their families.

Chief Guest Dr. Amarasuriya said: ‘It is inspiring to witness the achievements of the women entrepreneurs who travel a path of obstacles always in trying to achieve their ambition. With the capabilities women inherently possess, they do win amidst challenging situations. The WCIC is providing a great service for these enterprising women to scale and grow. It is a pleasure to be among such an audience and I wish the winners greater strength to contribute even more.’

The event as always took into consideration the performance of the applicants in the financial year applicable for the edition, 2024/25, where they share ‘My Story’ and certified information to establish their ‘Finance and Governance’ procedures.

The event highlighted the diversity and impact of women entrepreneurs across Sri Lanka and the SAARC region. With a record number of applications received, 31% of the businesses have been in operation for over a decade, 44% were under the age of 40 years, and a majority were first time applicants from diverse businesses. The applications were received from across the country, representing every province.

Through an extensive judging process with 12 judges evaluating every single applicant through the numerous panels, the final winners were showcased at the event. During the preliminary judging, five applicants from each of the revenue categories – Startup, Micro, Small, Medium, and Large – were selected for the final interview. Whilst the best of each sector wins the awards, the other two nominees will receive recognition.

The SAARC region too was well represented, and the top three businesses were featured at the event. The national/special awards were the highlight of the evening.

WCIC Chairperson Gayani de Alwis said: ‘WCIC Prathibhabhisheka, now in its fourth year since its relaunch, has gained strong momentum and credibility, firmly establishing itself as the national platform recognising women entrepreneurs in Sri Lanka, with an outreach that extends even to the SAARC region. This year’s event holds special significance as the WCIC celebrates its trailblazing 40th anniversary in 2025.’

‘The 2025 awards received the highest number of applications to date, reflecting an impressive level of quality and diversity across business ventures. Many of these women are unsung heroes who have overcome significant challenges to build resilient and competitive enterprises. Despite facing immense economic pressures, their perseverance and determination are truly commendable. Being a woman entrepreneur demands exceptional rigour and discipline, as they continually balance multiple roles alongside the complex demands of running a business,’ she added.

‘The WCIC celebrates their extraordinary strength and resilience and recognises their growing contribution to the Sri Lankan economy. Their businesses demonstrate professionalism, adaptability, innovation, and a strong commitment to sustainability. Their mindset and approach reflect a deep-rooted passion and an unwavering drive for success.’

Awards Co-Chairs Nilani Seneviratne and Tusitha Kumarakulasingam said: ‘The WCIC Prathibhabhisheka WEA is a truly distinctive initiative, with a format that sets it apart in every aspect. Conceived four years ago, the program was designed to recognise and reward outstanding women entrepreneurs for their achievements, integrity, and long-term commitment to enterprise. From its inception, the WCIC has crafted a process that is transparent, ethical, and robust, with 100% endorsement by Ernst and Young (EY), the internationally reputed audit firm.’

The awards follow a rigorous nine-month process, ensuring standards that are unmatched. Strict confidentiality is maintained throughout, with final results revealed only on the awards night. Applications comprise two key components: My Story and Finance and Governance. Each eligible submission is independently evaluated by multiple panels of judges. Shortlisted candidates then participate in interviews conducted by a separate panel.

An equally stringent process is followed for SAARC applicants, with evaluation carried out by judges from non-SAARC countries. Final award recipients are determined solely on the cumulative marks awarded through this process.

WCIC Prathibhabhisheka celebrates ventures that dare to challenge convention, demonstrating resilience and courage in overcoming obstacles along their entrepreneurial journeys.

‘Those honoured receive far more than an award; they gain a gateway to future opportunities. We have proudly witnessed how past winners have leveraged this recognition to amplify their success and scale new heights.’

The Prathibhabhisheka Women’s Entrepreneur Awards 2025 was presented by the WCIC in partnership with Platinum Partner AIA Sri Lanka, Diamond and Official Banking Partner DFCC Aloka, Gold Partners McLarens Group, Unilever Arunalu, Silver Partners Hayleys PLC, Maliban, Bronze Partners Impra Teas, Macbertan, Media Partner Wijeya Newspapers Ltd., Hospitality Partner Hilton Colombo, Knowledge Partner E and Y, Communication Partner Triad, and Event Partner Funtime.

Two Special Determination petitions have been filed before the Supreme Court contesting the constitutionality of proposed legislation to abolish pensions granted to Members of Parliament.

The Bill, titled Parliamentary Pensions (Repeal) Bill, was tabled in Parliament on 7 January 2026 by the Minister of Justice and National Integration.

One petition has been submitted by former Members of Parliament M.M. Premasiri, Nawarathne Banda, Nishantha Deepal Gunasekara and Saman Siri Herath, all of whom served in Parliament between 2004 and 2010. A separate petition has been filed by former MP Piyasoma Upali, who served from 1988 to 2004, together with former MP Upali Sarath Danstan Amarasiri, whose parliamentary tenure spanned 1988 to 2000. The petitioners argue that a significant number of retired parliamentarians have devoted between five and thirty-five years to public service, often at the cost of foregoing careers, businesses or professional advancement outside politics.

They further state that many retired MPs, as well as some surviving spouses, rely entirely on parliamentary pensions, which they say range between approximately Rs. 60,000 and Rs. 80,000 per month. According to the petitions, these amounts are inadequate to cover basic living costs, including medical and other essential expenses.

The petitioners are seeking a determination that the Bill requires approval by the people at a referendum and must be passed with a two-thirds majority in Parliament.

The petitions have been filed through Attorney-at-Law Sanath Wijewardane and are to be supported by President’s Counsel Dr. Wijeyadasa Rajapakshe.

The Government last week launched the national program, ‘Rebuilding Sri Lanka’, a comprehensive initiative designed to coordinate the nation’s recovery from the extensive devastation caused by Cyclone Ditwah.

The meeting was held on 13 January at the Bandaranaike Memorial International Conference Hall (BMICH) under the patronage of President Anura Kumara Dissanayake.

The ‘Rebuilding Sri Lanka’ program will be financed through a multi-pronged strategy. This includes the re-purposing of existing projects, the strategic re-allocation of funds, and the mobilisation of international donor support. A significant financial measure is the planned Rs. 500 billion supplementary estimate for 2026, dedicated to driving the recovery efforts.

To ensure effective and transparent execution, a 25 member Presidential Task Force, chaired by Prime Minister Dr. Harini Amarasuriya, has been established. This Task Force will oversee the entire program through eight dedicated sub committees focusing on critical areas including infrastructure, housing, and livelihood revitalisation.

In conjunction with the national effort, Defence Deputy Minister Major General (Retd.) Aruna Jayasekara, who chairs one of the key sub committees, convened the inaugural Steering Committee Meeting for the Post Disaster Needs Assessment (PDNA) on 14 January at his office. The PDNA Steering Committee provides strategic direction and ensures alignment with national priorities.

The Steering Committee, comprising key Government agencies and development partners, engaged in detailed discussions on establishing a robust framework for the assessment, the governance structure of the PDNA process, and establishing an effective coordination mechanism.

The Committee agreed on a detailed timeline to produce a comprehensive PDNA report with precise estimates for damage, economic loss, and recovery needs across vital sectors such as Housing and Settlements; Health and Nutrition; Agriculture, Tourism, Industry and Commerce; Irrigation, Transport, Water and Sanitation, Electricity; Environment, Employment/Livelihood, and Disaster Risk Reduction; and Governance, Gender, and Social Inclusion.

A significant portion of the discussion focused on addressing the challenges within the PDNA process, including the need for improved inter-

The Defence Deputy Minister conveyed his sincere appreciation to the development partners for their commitment and assured the Government’s fullest support in achieving the national objectives. He further emphasised the importance of a unified approach for a swift and resilient recovery.

The meeting was attended by the UN Resident Coordinator in Sri Lanka, the Director General and senior officials of the Disaster Management Centre (DMC), representatives from the European Union (EU), the World Bank (WB), the Asian Development Bank (ADB), the UN Development Programme (UNDP), the Asian Disaster Preparedness Centre (ADPC), UN agencies, and the National Planning Department (NPD).

Sri Lanka has emerged from the crisis phase with stronger macroeconomic buffers, but the economy is now confronting a more familiar constraint: how to generate durable growth without reopening old vulnerabilities, according to HNB Stockbrokers Director – Research Shehan Cooray.

Speaking at the HNB Investment Bank (HNBIB) Investment Outlook and Market Strategy 2026 Forum last week, Cooray said the economic impact of Cyclone Ditwah was likely to be contained, largely because the shock is occurring against a far stronger macro backdrop than in the past.

‘We are not expecting a major economic impact from the cyclone because, compared to previous natural disasters, Sri Lanka is entering this period with both a primary surplus and a current account surplus,’ he said.

He noted that the worst-affected regions account for only a modest share of national output and industrial capacity, while official reserves have risen to about $ 6.8 billion, providing additional resilience.

On growth, Cooray said HNB Stockbrokers expects real GDP to expand by about 4.5% in 2026, with nominal GDP rising to around Rs. 35 trillion as output finally moves beyond the 2018 pre-crisis peak.

‘Real GDP will surpass the 2018 high watermark during the course of the year, but where that growth is coming from is important,’ he said. ‘Most of the recovery so far has been driven by consumption, exports, and Government spending.’

Investment, however, remains the weakest part of the picture. Gross capital formation is forecast at around 27% of GDP in 2026, well below the levels seen during Sri Lanka’s higher-growth phases, when investment ratios consistently exceeded 30% of GDP.

‘For a small economy like Sri Lanka, consumption-led growth has limits,’ Cooray said. ‘Sustained higher growth has always gone hand in hand with higher investment, and that is still missing.’

He said subdued national savings mean that raising investment without widening the current account deficit will be difficult unless foreign direct investment (FDI) plays a larger role than it has historically.

‘The old approach of financing investment through external debt is no longer available,’ Cooray said. ‘If investment is to rise meaningfully, FDI will have to do much more of the heavy lifting.’

Turning to public debt, Cooray said the next major test for the economy would be securing credit rating upgrades that allow Sri Lanka to return to international Bond markets around 2028.

‘When Sri Lanka last accessed Bond markets between 2010 and 2018, average debt-to-GDP was about 73%,’ he said. ‘To realistically regain access, debt-to-GDP will likely need to fall below 80%, which is materially lower than the International Monetary Fund’s (IMF) indicative anchor of around 95%.’

While maintaining a primary surplus remains important, he said debt reduction will ultimately depend on sustaining growth rather than extracting further fiscal tightening from an economy that has already undergone significant adjustment.

On the monetary front, Cooray said inflation remains well below the Central Bank of Sri Lanka’s (CBSL) 5% target, even as private sector credit growth has accelerated to above 20% year-on-year (YoY).

‘That combination argues for caution,’ he said. ‘Despite low inflation, strong credit growth means the CBSL is likely to wait before considering further rate cuts.’

HNB Stockbrokers’ analysis places the implied policy rate band at around 7-8%, assuming inflation gradually moves back towards target in the second half of 2026.

Fiscal risks from Cyclone Ditwah-related spending also appear manageable, according to Cooray. While additional expenditure of about Rs. 500 billion could, on paper, reduce the primary surplus from the Budgeted 2.5% of GDP to closer to 1%, he noted that capital expenditure is typically under-executed.

‘In practice, actual outcomes may remain closer to the original fiscal targets,’ he said, pointing to the Government’s discretionary capital spending envelope and existing Treasury cash buffers.

On the external sector, Cooray said the current account surplus, estimated at over $ 1 billion in 2025, is forecast to narrow sharply to about $ 275 million in 2026 as vehicle imports normalise and annual external debt servicing remains in the $ 3-3.5 billion range.

‘Even with continued strength in remittances and services exports, lower surpluses alongside steady debt servicing suggest some further pressure on the currency,’ he said, estimating a depreciation of around 3-4%.

Cooray said Sri Lanka’s macro story has shifted decisively away from crisis management.

‘The buffers are stronger and policy credibility has improved,’ he said. ‘What happens next will depend less on emergency measures and more on whether the economy can attract investment and grow fast enough to bring debt down to market-access levels.’