February 24, Colombo (LNW): The government’s approval rating has seen a remarkable surge following the recent election, climbing from a modest 24 per cent in July 2024 to an impressive 62 per cent by February 2025, according to the latest findings from Verité Research’s ‘Mood of the Nation’ poll.

This dramatic shift marks a significant turnaround in public opinion, with the current government enjoying its highest approval since the economic crisis.

For the first time in years, a majority of Sri Lankans (55 per cent) now believe the nation’s economic conditions are improving.

This contrasts sharply with the overwhelming negativity that prevailed during the depths of the crisis.

However, despite the positive trend, a substantial 47 per cent of respondents still describe the overall economic situation as “poor,” although this represents a notable decline from 71 per cent in July 2024.

When comparing the results from July 2024 to February 2025, the number of citizens who disapprove of the government’s performance has dropped drastically, from 60 per cent to just 16 per cent.

In the same period, the proportion of people who felt the economy was worsening fell by a staggering 51 points, from 65 per cent to a much lower 14 per cent.

In terms of government approval, 62 per cent of respondents expressed their support, more than doubling the figure recorded in the previous survey. In stark contrast, only 16 per cent voiced disapproval, a sharp reduction from the 60 per cent who disapproved last year.

The survey’s results indicate a clear shift towards greater optimism about both the government’s effectiveness and the country’s economic prospects.

The public’s outlook on the economy has also seen a marked improvement. In response to the question about whether economic conditions are getting better or worse, 55 per cent of participants now believe the economy is improving, up from just 30 per cent in July 2024.

Meanwhile, only 14 per cent think the economy is deteriorating, down substantially from 65 per cent six months ago.

When asked to evaluate the state of the economy, 35 per cent of respondents rated it as “good” or “excellent,” a 7 per cent increase from July 2024. While 47 per cent still consider it to be “poor,” this figure has dropped significantly from 71 per cent, indicating a shift in public perception of the nation’s financial health.

This survey, part of Verité Research’s Syndicated Surveys initiative, was conducted between 31 January and 5 February 2025. It was based on a randomised, nationally representative sample of 1,050 Sri Lankan adults, with a maximum margin of error of ±3.0% at a 95 per cent confidence level. The polling was carried out in partnership with Vanguard Survey (Pvt) Ltd.

By: Staff Writer

February 23, Colombo (LNW): The World Bank plans to finance three key projects over the next three months totaling US $200 million. These projects will support rural development and education and will establish a facility to attract private investment in renewable energy.

Its support over the medium-term, including enhancing the tourism sector, the development of lagging regions—especially in the North  promoting the logistics sector as a driver of growth; improving service delivery, and ensuring the workforce is equipped with the skills required by a rapidly evolving labor market.

“Sri Lanka’s growth prospects depend on the mobilization of additional private sector investment, including foreign direct investment. Ample opportunities exist in the digital economy, tourism, logistics, agricultural value chains, and renewable energy, but realizing this potential will require further improvements in the business climate.

The World Bank’s program in Sri Lanka for the coming years will be summarized in the upcoming mid-term review of the World Bank Group’s Country Partnership Framework (CPF) for Sri Lanka.

The updated CPF, scheduled to be finalized within the next six months, will build on the government’s key priorities and serve as a roadmap for continued collaboration between Sri Lanka and the World Bank Group.

The World Bank’s South Asia Regional Director, Prosperity Practice Group, Mr. Mathew Verghis has met with the Secretary to the Prime Minister, Mr. Pradeep Saputhanthri, at the Prime Minister’s Office.

Discussions focused on Sri Lanka’s current economic outlook, ongoing reforms, and potential areas for enhanced collaboration between the World Bank and the Government of Sri Lanka, according to the PM’s Media Division.

During the discussions, the World Bank delegation expressed appreciation for the progress made in Sri Lanka’s debt restructuring process and commended the government’s recent Budget Speech – 2025 as a positive step towards economic recovery.

They underscored the importance of effective policy implementation and highlighted the Prime Minister’s Office’s crucial role in ensuring seamless interagency coordination.

Mr. Saputhanthri provided an overview of the government’s key priorities, emphasizing that the proposed budget of 2025; focuses on economic stability, good governance, and sustainable development, the statement said.

He outlined the government’s commitment to promoting investment, facilitating trade, and driving digital transformation. He Further highlighted that addressing the socio-economic challenges faced by vulnerable populations and maintaining a firm stance against corruption are among the government’s top priorities.

The Secretary also emphasized the importance of strengthening logistics for Small and Medium-sized Enterprises (SMEs) and the agricultural sector, with particular attention to the development of health, education, and tourism sectors. The discussion also covered the government’s focus on legal reforms to support these initiatives, it added.

By: Staff Writer

February 23, Colombo (LNW): The National Chamber of Commerce of Sri Lanka organized the Post-Budget Analysis Seminar 2025 on February 19, providing an in-depth review of the National Budget 2025. The event brought together industry leaders, policymakers, and financial experts to evaluate the budget’s economic and business implications.

The seminar offered a thorough examination of key fiscal policies, tax proposals, government expenditure, and revenue-generation strategies.

 The expert panel featured prominent figures such as Hasitha Raddella, Principal of Tax and Regulatory at KPMG Sri Lanka; Jayani C. Wickrama Arachchi, Director of the Department of Fiscal Policy at the Ministry of Finance, Planning, and Economic Development; S. Iyesha Asanthi, Commissioner of Tax Policy and Legislation at the Inland Revenue Department; and Ruwan Fernando, former Partner at Ernst & Young and National Chamber Council Member. The session was moderated by Nandika Buddhipala, CFO of Commercial Bank PLC and past president of the National Chamber of Commerce of Sri Lanka.

The discussion explored critical aspects of the budget, including its impact on businesses, sector-specific implications, and proposed tax reforms. Hasitha Raddella highlighted that the budget aims to enhance Sri Lanka’s fiscal management while focusing on taxation reforms to drive economic growth. He emphasized the government’s commitment to digitalizing public services to facilitate business operations, although clarifications on VAT implications for digital services remain pending.

Iyesha Asanthi elaborated on the transition from the Simplified Value Added Tax (SVAT) system to a Risk-Based Refund System, which is expected to streamline VAT refund processes. She noted that exporters selling over 50% of their total supplies may participate in a pilot project for the new system. The standard VAT rate remains at 18%, with the threshold set at Rs. 15 million per quarter and Rs. 60 million annually.

Due to the prevailing economic situation, the 2025 budget does not include tax exemptions or concessions. However, individual taxpayers will benefit from an increased tax relief threshold, rising from Rs. 1.2 million to Rs. 1.8 million, alongside relaxed tax brackets that will positively impact employees.

Addressing fiscal constraints, Jayani Wickrama Arachchi emphasized the importance of strategic policy implementation to maintain economic stability while managing high-interest payments resulting from Sri Lanka’s debt obligations. She stressed the necessity of progressing despite these financial challenges.

Nandika Buddhipala acknowledged the government’s efforts in formulating the 2025 budget amid stringent fiscal conditions, including compliance with the Public Finance Management Act and the IMF Debt Sustainability Framework. He underlined the urgency of addressing debt servicing and interest costs while fostering an economy conducive to exports and foreign direct investment (FDI). Buddhipala also welcomed proposals to expand Sri Lanka’s Free Trade Agreements (FTAs), particularly through participation in the Regional Comprehensive Economic Partnership (RCEP), and the extension of Double Taxation Agreements (DTAs) beyond the existing 46 nations.

Adding to the discussion, Ruwan Fernando described the budget as forward-thinking, emphasizing its focus on innovation and export growth to enhance economic resilience. He praised the allocation of resources aimed at strengthening the business sector.

Attendees gained valuable insights into the policy shifts and emerging business opportunities. During the Q&A session, participants sought clarifications on the establishment of a development bank to support SMEs and new entrepreneurs, as well as on measures to provide relief to exporters.

The National Chamber of Commerce reaffirmed its dedication to equipping the business community with timely and expert-driven insights. The Post-Budget Analysis Seminar 2025 was widely appreciated for its engaging discussions and practical takeaways, assisting businesses in planning for the year ahead.

By: Staff Writer

February 23, Colombo (LNW): The Sri Lankan tea industry has entered 2025 with cautious optimism, witnessing steady production growth and emerging opportunities in key markets.

While global demand for high-quality Ceylon Tea remains robust, industry stakeholders are focused on enhancing production efficiency, sustainability, and market diversification.

Despite ongoing challenges such as climate variability, rising input costs, and labor concerns, the sector is expected to maintain stable growth, with an estimated annual output of 280 million kilos.

Industry experts predict that Sri Lanka will benefit from increasing demand in markets like India and China, while traditional buyers such as Iraq, Russia, and Libya continue to play a vital role in sustaining export performance.

A significant shift in the industry has been the growing emphasis on value addition, particularly in tea packets, tea bags, and instant tea.

This trend aligns with global consumer preferences for convenience and premium specialty teas. Investments in mechanization and sustainable agricultural practices are expected to improve efficiency while ensuring the long-term viability of the tea sector.

Additionally, government policies and incentives for sustainable tea cultivation, alongside improved use of fertilizers and technological advancements, are anticipated to bolster production and export performance.

The year started with mixed results, with Sri Lanka recording a modest increase in tea export volumes while experiencing fluctuations in export value. In January 2025, tea exports reached 19.37 million kilos, reflecting a slight growth of 0.61 million kilos compared to 18.76 million kilos in January 2024.

 Value-added segments, including tea packets, tea bags, and instant tea, performed well, whereas bulk tea and green tea saw declines.

The free on board (FOB) value for tea in January 2025 averaged Rs. 1,722.78 per kilo, showing a year-on-year (YoY) decrease of Rs. 26.14 from Rs. 1,748.92 in January 2024.

 However, in US dollar terms, tea exports experienced a marginal increase of $0.38, signaling stability in international markets despite currency fluctuations.

While all tea categories reflected slight gains in dollar terms, rupee-based earnings declined across most segments, except for instant tea.

Iraq emerged as the top importer of Ceylon Tea, with imports reaching 3.02 million kilos, marking a 21% YoY increase from 2.50 million kilos in January 2024.

 Russia remained the second-largest importer, although its imports declined by 11% YoY to 1.77 million kilos from 1.98 million kilos in 2024. Libya recorded an exceptional 406% YoY growth, securing the third position with 1.68 million kilos.

Other key importers in January 2025 included the UAE (1.27 million kilos, down 36% YoY), Türkiye (1.08 million kilos, down 37% YoY), Chile (0.78 million kilos, up 24% YoY), Saudi Arabia (0.89 million kilos), and China (0.80 million kilos, up 5% YoY).

In 2024, Sri Lanka exported a total of 245.7 million kilos of tea, generating $1.4 billion in revenue, slightly surpassing the 2023 figure of 241.9 million kilos.

 A significant achievement was the record-high export value of Rs. 437 billion, approximately $1.435 billion. With projections of 280 million kilos in 2025, the industry remains cautiously optimistic about future growth, focusing on production efficiency, quality enhancement, and market expansion to sustain its global competitiveness.

By: Staff Writer

February 23, Colombo (LNW): The Asian Development Bank (ADB) and the World Bank (WB) yesterday signed a new groundbreaking Full Mutual Reliance Framework (FMRF) to deepen their collaboration on co-financed public sector projects. This first of a kind arrangement between MDBs aims to streamline project processing and implementation and deliver faster and more efficient results to borrowing clients.

Under FMRF, borrowers in WB-ADB co-financings can rely on one set of rules – using the policies and procedures of either WB or ADB – on all aspects of project design, preparation, appraisal, supervision, completion and evaluation. FMRF is expected to generate efficiencies, time and cost-savings, better outcomes and a closer alignment of policies – advancing the aims of a more cohesive “Multilateral Development Bank System”.

The framework also responds to calls by the international community, including the G20, for multilateral development banks (MDBs) to work more cohesively to maximise impact and address escalating development challenges more efficiently and with better results.

“The Full Mutual Reliance Framework is a significant step in our collaboration with the World Bank and will deliver lasting benefits to communities and economies across Asia and the Pacific,” said ADB President Masatsugu Asakawa. “By leveraging our respective strengths, we can enhance efficiency, scale impact, and provide a strong platform for sustainable and inclusive growth.”

“This partnership between the World Bank Group and the Asian Development Bank is a testament to the deep trust and abiding confidence between our institutions,” said World Bank Group President Ajay Banga.

“It reflects a broader shift in development finance—where collaboration, not competition, delivers greater impact. By combining our strengths, we are making it faster, easier, and more cost-effective for countries to access the support they need.

 More than just an agreement, this is a model for how development banks can work together to drive better outcomes for the people we serve.”

The framework will initially apply to selected public sector projects during a four-year initial phase, starting in 2025, to refine operational approaches and assess outcomes.

Building on earlier co-financing efforts between the two institutions, such as the Procurement Framework Agreement of 2018, the FMRF incorporates lessons learned from engagements with civil society organisations, borrower countries and other stakeholders.

The FMRF is expected to serve as a model for deeper collaboration among MDBs and help address pressing development needs while fostering knowledge sharing and innovation.