Sri Lanka’s external sector surged ahead in March 2025, delivering its highest-ever monthly current account surplus since the Central Bank began compiling such statistics in January 2023. The US$ 459 million surplus marks the third consecutive month of positive balances, offering a promising outlook for the island’s fragile economic recovery.

At the heart of this success was a record US$ 693 million in workers’ remittances, as overseas Sri Lankans sent home more money than ever before for the month of March. Improved global labor mobility, favourable exchange rates, and better formal remittance systems contributed to this significant spike.

Meanwhile, tourism earnings rose to US$ 354 million, up from US$ 338 million a year ago. With renewed destination marketing, visa relaxations, and improved global perception, Sri Lanka continues to strengthen its tourism rebound—vital for employment and foreign exchange stability.

“This performance reflects the resilience of core inflow channels and growing investor confidence,” a senior Central Bank official stated.

However, not all indicators pointed upward. The merchandise trade deficit widened to US$ 396 million, though it marked a slight improvement from February’s US$ 411.3 million. The terms of trade improved marginally, as global import prices declined faster than exports. Export and import volumes both grew, suggesting rising economic activity.

On the financial front, foreign investment in government securities posted a net inflow of US$ 49 million, while the Colombo Stock Exchange (CSE) saw a minor net outflow of US$ 6 million, reflecting cautious optimism among international investors.

Crucially, Sri Lanka’s gross official reserves rose to US$ 6.5 billion, driven by the fourth IMF tranche under the Extended Fund Facility (EFF) and Central Bank FX purchases totaling US$ 402 million. These developments enhance the country’s financial buffer and support debt repayment commitments.

Despite the positive inflow momentum, the Sri Lankan rupee depreciated by 2.3% against the US dollar as of April 2025. Analysts warn this remains a vulnerability, particularly amid global dollar strength and import-linked currency pressures.

Bottom Line:

Sri Lanka’s March 2025 performance marks a turning point in its post-crisis recovery. While remittances and tourism shine, sustained policy focus is needed to manage trade deficits, bolster investor confidence, and maintain currency stability.

Visa-free entry, premium packages, and wellness focus Position Island as top GCC destination

Sri Lanka is set to experience a major boost in tourist arrivals from the Gulf Cooperation Council (GCC) and wider Middle East markets following its impactful presence at the Arabian Travel Market (ATM) 2025 in Dubai. With a focus on community-based experiences, wellness retreats, and luxury hospitality, the Sri Lanka Tourism Promotion Bureau (SLTPB) presented a refreshed vision aimed at positioning the island as a premier travel destination for discerning global travellers.

During a press conference held on the sidelines of the event, SLTPB Managing Director Sampath Nishshanka emphasised the country’s unique offering: “Sri Lanka is not just a destination—it is an experience shaped by warmth, culture, and meaningful connections. We take pride in our heritage and genuine hospitality. At ATM 2025, we invite the world to rediscover Sri Lanka with fresh eyes and open hearts.”

SLTPB highlighted several strategic initiatives, including collaborations with GCC-based airlines and travel agencies to improve connectivity and promote curated travel experiences tailored to regional tastes. Visa-free entry for GCC nationals, direct flights, and exclusive luxury packages have further enhanced the island’s appeal among Middle Eastern travellers.

The Sri Lanka Pavilion at ATM 2025 showcased a diverse group of co-exhibitors ranging from boutique hotels and wellness retreats to destination management companies (DMCs). These stakeholders expressed strong interest in forging regional partnerships, particularly with travel professionals catering to family holidays, spiritual journeys, and adventure tourism—segments that align with growing summer travel trends in the Middle East.

Infrastructure upgrades, new hospitality offerings, and enhanced digital marketing efforts are central to Sri Lanka’s evolving tourism strategy. The SLTPB also spotlighted its efforts to strengthen media and trade engagement through authentic storytelling and campaigns that build trust and highlight Sri Lanka’s safe, culturally rich, and nature-filled experiences.

Positioned as a halal-friendly destination, Sri Lanka continues to attract travellers from the GCC with its year-round tropical climate, luxurious resorts, and diverse landscapes—from golden beaches to misty mountains. The island’s commitment to inclusive, sustainable tourism ensures that both high-end and experience-driven travellers find compelling reasons to explore its many offerings.

By actively engaging at ATM 2025, Sri Lanka signals its intent to deepen ties with Middle Eastern markets and pave the way for a robust, sustainable recovery in its tourism sector, which remains a vital pillar of the nation’s economy.

The International Monetary Fund (IMF) has called on Sri Lanka to expedite its state-owned enterprise (SOE) reforms, stressing that progress is essential for stabilizing the economy. The push comes amid delays following the recent shift in government policy, which reversed the previous administration’s privatization plans.

Evan Papageorgiou, the IMF’s new Mission Chief for Sri Lanka, highlighted the need for quicker action, particularly concerning major state entities like SriLankan Airlines, the Ceylon Petroleum Corporation (CPC), and the Ceylon Electricity Board (CEB). These entities have long posted heavy losses, contributing significantly to the country’s fiscal crisis and its 2022 sovereign debt default.

“There is a way forward, and we want to see more progress,” Papageorgiou said during a virtual media briefing on Tuesday (April 29), held to discuss the Staff-Level Agreement on the Fourth Review under the IMF’s Extended Fund Facility (EFF) for Sri Lanka.

The previous administration under Ranil Wickremesinghe had advanced plans to reduce state involvement in certain commercial enterprises. However, the new government led by President Anura Kumara Dissanayake has halted such efforts, citing the party’s anti-privatization stance. The divestment process of SriLankan Airlines was paused, with the government pledging to introduce alternative reforms instead.

As part of its response, the Cabinet has appointed a committee to review a draft of the proposed “State Commercial Enterprises Management Bill,” aimed at insulating SOE boards from political interference and ensuring appointments of qualified professionals.

Despite the slowdown in divestment, Papageorgiou acknowledged some encouraging signs. “We understand that a strategic plan is being prepared to restore SriLankan Airlines’ operational viability and address legacy debt,” he said. The government has allocated Rs. 20 billion in the 2025 budget for the airline’s debt, and a financial advisor has been engaged to help restructure its international bonds.

Still, Papageorgiou emphasized the need to accelerate reform efforts. “These are all steps in the right direction, but they need to pick up pace,” he noted.

He stressed the importance of improving SOE transparency and financial management, pointing to ongoing IMF efforts to mandate timely publication of financial statements for the 52 largest SOEs. Additionally, he underscored the need to implement cost-recovery pricing and limit foreign currency borrowing by non-financial SOEs to avoid further fiscal risk.

“These reforms are crucial to reduce fiscal burdens on the state and ensure taxpayers are not left subsidizing inefficiencies,” Papageorgiou said. He added that SOEs must operate efficiently and transparently, free from corruption, and provide quality services to the public in a financially sustainable manner.

Sri Lanka’s world-renowned gem and jewellery industry, a centuries-old sector central to the nation’s economy and cultural identity, is under serious threat from a proposed reciprocal tariff by the United States. Industry leaders have voiced alarm over the potential fallout, warning that the tariff hike could severely disrupt exports, reduce competitiveness, and endanger the livelihoods of over 600,000 people directly and indirectly employed across the value chain.

The United States currently sources around 10% of its gemstones from Sri Lanka, either directly or via key intermediary trade hubs such as Thailand, Hong Kong, Dubai, and Switzerland. This longstanding trade relationship has nurtured mutual economic growth, while helping preserve a rich tradition of craftsmanship and entrepreneurship rooted in Sri Lanka’s gem-producing heritage.

However, industry sources now warn that the proposed US tariffs could reverse decades of progress. By making Sri Lankan gems and jewellery more expensive in the American market, the new duties would reduce export volumes, squeeze margins for small and medium-sized enterprises (SMEs), and trigger job losses across sectors—from mining and cutting to trading, designing, and exporting.

“This could have devastating consequences for families already burdened by economic challenges and recovering from the pandemic,” one source noted. The industry fears that the social and economic ripple effects of a tariff would extend far beyond business losses, threatening the very fabric of communities dependent on the gem trade.

Moreover, the tariff risks fracturing a bilateral relationship built on trust, quality, and mutual economic benefit. Sri Lanka’s gemstone sector has long been prized globally for its quality and diversity, contributing significantly to the US jewellery market. Industry leaders stress that maintaining duty-free or preferential access is crucial—not only for preserving local livelihoods but also to meet American consumer demand for authentic, ethically sourced gems.

Given the seriousness of the threat, Sri Lanka’s gem and jewellery sector is calling on the government to engage in urgent diplomatic dialogue with the US administration and relevant trade bodies. The goal: to seek the removal or reconsideration of the proposed tariff.

“Preserving this vital trade link is not just about economic survival—it’s about upholding fair trade, protecting heritage, and ensuring international cooperation endures in uncertain times,” industry representatives emphasized.

As Sri Lanka navigates a fragile post-pandemic recovery, the outcome of this trade dispute could have lasting repercussions on one of its most iconic and economically vital industries.

The Sabaragamuwa Provincial Health Services Office has initiated legal proceedings against 28 identified dengue breeding sites within the Ratnapura Municipal Council area, according to Dr. Kapila Kannangara, Director of Provincial Health Services.

In addition to these legal measures, red notices have been issued to 135 other locations deemed vulnerable to dengue mosquito breeding. Dr. Kannangara highlighted that as of January 2025, the Ratnapura District has recorded approximately 1,700 dengue cases, with around 515 of them reported specifically from the Ratnapura Municipal Council area.

Among those affected, 199 staff members of the Ratnapura Teaching Hospital have contracted the disease, further emphasizing the seriousness of the outbreak. The health sector is actively conducting inspections across a wide range of premises including schools, religious sites, government and private institutions, roads, and private properties deemed suspicious within the municipality.

The ongoing dengue eradication programme, led by the Sabaragamuwa Provincial Health Services Office under the Provincial Council, is being supported by the Sri Lanka Army to strengthen monitoring and control efforts.

The Ministry of Foreign Affairs, Foreign Employment and Tourism has allocated Rs. 131.20 million for tourism development initiatives in the Jaffna District for 2025. This funding was the main focus of a recent review meeting held at the Jaffna District Secretariat, chaired by Government Agent M. Piiratheepan.

The meeting assessed progress and planning for key projects intended to revitalise several of Jaffna’s significant tourist attractions. Among the priority sites were Casuarina Beach in Karainagar, various islands in the Kayts Division, and the culturally rich coastal zones of Tellippalai.

Casuarina Beach, one of the most popular coastal destinations in the Northern Province, is slated for major enhancements. It was agreed that on-site inspections in collaboration with relevant departments would guide the utilisation of the allocated funds, with the aim of transforming the beach into a fully-equipped, accessible, and tourist-friendly location.

Island tourism was also a central topic, with particular focus on the renovation of key boat piers. The Puliyanthivu pier in Analaitivu and the Kannaki Amman pier in Kayts will undergo improvements to boost transport connectivity to the islands. Additionally, the Kayts pier area will receive landscaping upgrades including tree planting and seating facilities, designed to improve the overall visitor experience.

In Tellippalai, attention was drawn to Keerimalai Beach, a site of cultural and religious significance to the Tamil community. Following a request by the Government Agent, Rs. 35 million was allocated for the removal of coastal rocks that obstruct traditional Hindu rituals for the deceased. This project will also include infrastructure improvements to ensure better access and visitor amenities.

The Kankesanthurai beach, which hosts a children’s park currently damaged by sea erosion, was also reviewed, with plans for immediate restoration being discussed.

GA Piiratheepan stressed the importance of completing all development work within the planned timeframe and urged all departments to implement sustainable maintenance strategies to ensure long-term success of the projects.

The meeting was also attended by Additional Government Agent (Land) K. Shrimohanan, Planning Director E. Surendranathan, Chief Engineer K. Thirukumar, Divisional Secretaries from Tellippalai, Karainagar, and Kayts, as well as local council secretaries and tourism officials.

President Anura Kumara Dissanayake will embark on an official state visit to Vietnam from May 4 to 6, at the invitation of Vietnamese President Luong Cuong. The visit marks an important milestone in the longstanding relationship between Sri Lanka and Vietnam, as the two nations commemorate 55 years of diplomatic ties in 2025.

During his visit, President Dissanayake is scheduled to hold bilateral discussions with President Luong Cuong and Prime Minister Pham Minh Chinh. He will also meet with other senior Vietnamese leaders, including the General Secretary of the Communist Party of Vietnam.

A highlight of the visit will be President Dissanayake’s role as the Chief Guest at the United Nations Day of Vesak celebrations in Ho Chi Minh City, where he will deliver the keynote address. This participation underscores Sri Lanka’s spiritual and cultural contributions to the international Buddhist community.

The two countries are expected to sign a series of Memoranda of Understanding and bilateral agreements aimed at deepening cooperation across various sectors. The visit will also include engagements with the Vietnamese business community, reflecting efforts to boost economic collaboration between the two nations.

President Dissanayake will be accompanied by Minister of Foreign Affairs, Foreign Employment and Tourism Vijitha Herath, along with senior government officials, highlighting the significance of the state visit in strengthening political, economic, and cultural ties between Sri Lanka and Vietnam.

The National Credit Guarantee Institution Limited (NCGIL) has launched a landmark initiative aimed at enhancing access to finance for Sri Lanka’s Micro, Small, and Medium Enterprises (MSMEs). This national-level programme, operated in partnership with the Government of Sri Lanka (GOSL) and leading financial institutions, marks the first of its kind in the country.

The initiative encourages Participatory Financial Institutions (PFIs) to issue loans to MSMEs based on the viability of business cash flows rather than traditional collateral-based lending. NCGIL provides guarantee cover to these shareholder Financial Institutions (SFIs) to mitigate their credit risk, enabling more flexible and inclusive financing for the MSME sector — widely regarded as the backbone of the country’s economy.

NCGIL began operations in January and has already issued its first set of guarantees to three financial institutions to partially cover loans granted to three MSMEs. Thirteen PFIs, including eight commercial banks, two specialized banks, and three licensed finance companies, are involved in the programme. These include People’s Bank, Bank of Ceylon, Regional Development Bank, Commercial Bank, Hatton National Bank, Sampath Bank, Seylan Bank, National Development Bank, Nations Trust Bank, Sanasa Development Bank, LB Finance, Central Finance, and Citizens Development Business Finance.

The programme is supported by a USD 50 million long-term fund provided by the Asian Development Bank (ADB), which accounts for 90% of NCGIL’s capital. The remaining 10%, amounting to USD 5.375 million, is invested by the 13 financial institutions.

Eligible MSMEs — defined as businesses with annual turnover under Rs. 1 billion — can now apply for term loans ranging from Rs. 500,000 to Rs. 25 million for capital expenditure or permanent working capital needs. Financial institutions participating in the programme can request a credit guarantee from NCGIL to cover up to 67% of the approved principal loan amount.

This initiative is expected to significantly improve credit accessibility for MSMEs and drive entrepreneurship and economic growth across Sri Lanka.

The Intertropical Convergence Zone (where winds from the Northern Hemisphere and Southern Hemisphere converge) further affects the island’s weather.

Showers or thundershowers will occur at several places in Western, Sabaragamuwa, Central, Southern, Uva, Eastern and North-central provinces after 1.00 p.m.

Fairly heavy falls about 75 mm are likely at some places in Western, Sabaragamuwa, Central, Southern and Uva provinces.

Showers or thundershowers may occur at a few places elsewhere of the island during the afternoon or night.

Showers or thundershowers may occur in Western and Southern provinces and in Puttalam and Mannar districts in the morning too.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

Misty conditions can be expected at some places in Central and Uva provinces and in Ampara and Polonnaruwa districts during the morning.

May 02, Colombo (LNW): Sabaragamuwa University has initiated a formal internal inquiry following the sudden and deeply troubling death of a 23-year-old undergraduate, Charith Dilshan, a second-year student enrolled in the Department of Engineering Technology.

The incident, which has sent shockwaves through the academic community, has raised serious concerns over the possible involvement of hazing practices.

The university’s administration has constituted a special three-member investigative committee, led by Senior Professor A.A.Y. Amarasinghe. Professor Kapila Rathnayaka and legal expert Attorney-at-Law Y.S. Chandrasekara have also been appointed to the panel.

Their mandate is to carry out a comprehensive review of the circumstances surrounding the student’s death and to submit their findings at the earliest opportunity.

In a statement issued by Vice-Chancellor Professor Sunil Shantha, the university expressed its deep sorrow over the loss and affirmed its commitment to uncovering the truth behind the incident.

The administration has pledged to support the inquiry with full transparency and seriousness.

The tragic event has stirred further concern after a fellow student lodged a formal complaint with the Samanalawewa Police, claiming that the deceased had endured ragging—an entrenched form of bullying and harassment often reported in Sri Lankan universities.

According to the complaint, Dilshan may have succumbed to psychological pressure stemming from such treatment, leading to his decision to take his own life by hanging.

Initial reports suggest that Dilshan, known amongst peers as a quiet and dedicated student, had shown signs of emotional distress in the days leading up to his death.

The allegation of ragging being a contributing factor has brought renewed scrutiny to campus safety and student welfare, reigniting the national debate on the persistent issue of institutionalised abuse in higher education.

Authorities have yet to release further details regarding the ongoing police investigation, but both criminal and administrative inquiries are expected to proceed in parallel.

The university has called upon students and staff to cooperate fully with investigators and has assured the community that necessary action will be taken based on the committee’s recommendations.

The case has also prompted broader calls for reform, with student groups and civil society organisations urging a crackdown on ragging culture and the introduction of more effective mental health support systems on campus.