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Economic Projections 2025
Key economic targets for Sri Lanka in 2025
Primary Sources
Unlocking Sri Lanka's economic success: Harnessing the power of ...
Opinion By Dr. Ravinthirakumaran Navaratnam The economic success or stagnation of a country depends on factors such as strong institutions, effective governance, economic policies, education, infrastructure, and resource management. Geography plays a role, with resource-rich nations having an advantage, but mismanagement can lead to stagnation. Education and skill development create a productive workforce, while modern infrastructure and technology drive economic efficiency. Political stability and investor-friendly policies attract growth, whereas corruption and instability hinder progress. Colonial history also influences development, with some nations overcoming past disadvantages while others struggle with lingering economic disparities. Sri Lanka’s economy has been facing severe challenges, including a high debt burden, foreign exchange shortages, inflation, slow economic growth, and rising unemployment. The country’s debt crisis led to a sovereign default in 2022, making debt restructuring a top priority. Foreign reserves remain low, limiting the ability to import essential goods such as food, fuel, and medicine. Inflation, although moderating, continues to impact the cost of living, reducing the purchasing power of ordinary citizens. Economic growth has been sluggish, with contractions in key sectors such as tourism, manufacturing, and agriculture. Additionally, structural weaknesses, including an oversized public sector and inefficient state-owned enterprises, have contributed to fiscal instability. Political and social unrest have further weakened investor confidence, making economic recovery even more challenging. As of March 17, 2025, Sri Lanka is experiencing a period of economic stabilisation and growth following the severe crisis of 2022. The government has implemented significant reforms, leading to budgetary discipline, a bullish stock market, and improved credit conditions. The economy is projected to grow by 5% in 2025, with a primary budget surplus of 2.3% of GDP, aligning with International Monetary Fund (IMF) programme targets. Tourism has seen a resurgence, contributing to economic recovery. The government is also focusing on digital transformation, allocating LKR 3 billion towards digital investments and aiming to generate US $15 billion in revenue through the digital economy by 2030. However, challenges remain, including the need to boost tax compliance, better target social welfare, and manage capital spending to maintain fisca...
The Global Walk for Peace: Sri Lanka's chance to lead the world away ...
The war between Iran, the USA and Israel has taken a step back from a dangerous precipice. However, the horrifying images emerging from these wars remind us that humanity remains trapped in a cycle of violence that has claimed billions of lives. The justifications and underlying ‘causes’ for war are numerous. Several culprits have been identified for the current cycles of violence, including actions against the dominance of the US petrodollar, a battle to gain energy security and ensure economic power, and an objective of curtailing the nuclear capabilities of Iran. Whatever the causes are, the consequences have been devastation of infrastructure, destruction of the environment, and deaths running into the thousands. Amidst this darkness, Sri Lanka drew some admiration for rescuing Iranian sailors from a watery grave. This humanitarian act could echo the historic stand taken by former Prime Minister J.R. Jayewardene at the post-World War 2 Peace Conference in 1951. His strong support for a free and independent Japan set the tone for the conference – and his speech is taught in Japanese history textbooks to this day. The declaration of the Indian Ocean as a Zone of Peace by Prime Minister Sirimavo Bandaranaike was another instance in which we were on the centre stage of global peace. Does the Global Walk for Peace offer an opportunity for Sri Lanka to lead a global peace initiative? Why Peace? Counting the catastrophic costs of war War is not merely a political or economic issue; it is a catastrophe for humanity from all dimensions. The effects of war on development, the environment and health are unimaginable. War results in a catastrophe for human health of unimaginable proportions. Since the Second World War, conflicts between nations have killed and maimed more than a billion human beings. Wars have burnt alive millions within minutes – as witnessed in Hiroshima, Nagasaki, and in the use of napalm bombs in other wars. Wars have destroyed entire societies, displaced millions of families, and crippled or scarred millions mentally and physically for a lifetime. War is anti-health. But these figures hide the consequences which go far beyond immediate death and injury, affecting people, society and the planet. A framework called "The Twelve Dimensions of Health Impacts of War" – or the 12 D Framework – reveals the scope of devastation related only to health. (See "The 12 dimensions of health impacts of war", freely accessible from https://doi.org/10.1136/bm...
Strong Economic Recovery Lifts Sri Lanka, Yet Millions Remain ...
The World Bank's Sri Lanka Development Update 2026 says Sri Lanka's economy is recovering strongly from the 2022 financial crisis, supported by reforms, rising exports, and improving fiscal stability, despite the severe impact of Cyclone Ditwah. However, poverty, food insecurity, and global risks, especially the Middle East conflict, continue to threaten the country's fragile recovery ...
Sri Lanka cannot mistake calm for economic strength: CBSL cautions
Sri Lanka cannot afford to treat the absence of a crisis as a sign of strength, a top Central Bank official warned yesterday, as repeated global and domestic shocks are likely to continue testing ...
