As Sri Lanka prepares for a కీల review of its economic reform programme, the International Monetary Fund is set to evaluate how the ongoing Gulf conflict could reshape the country’s recovery trajectory. The assessment is expected to influence both policy direction and the pace of financial support under the bailout framework.

The IMF’s upcoming mission will focus not only on traditional macroeconomic benchmarks but also on the evolving external environment. At the forefront is the Middle East crisis, which the Fund views as a risk capable of undermining recent economic stabilisation.

Since entering the Extended Fund Facility programme, Sri Lanka has recorded notable progress. Economic growth rebounded to 5% in 2025, inflation fell sharply, and foreign reserves improved. Debt restructuring negotiations are also nearing completion, signalling a కీల turning point in the country’s post-crisis recovery.

However, IMF officials caution that these gains could be fragile. Julie Kozack emphasised that geopolitical developments may weigh on Sri Lanka’s near-term outlook, particularly through disruptions to external inflows. This introduces a layer of uncertainty into what had been a cautiously optimistic recovery narrative.

The significance of the upcoming review extends beyond technical evaluation. A successful outcome would unlock a substantial tranche of funding estimated between $650 million and $700 million providing critical support to the country’s fiscal and external financing needs. Conversely, a негатив assessment shaped by external risks could complicate disbursement timelines or lead to stricter policy conditions.

One of the key challenges for policymakers will be balancing reform commitments with the need to respond to external shocks. The IMF programme emphasises fiscal consolidation, revenue mobilisation, and structural reforms. Yet, a deterioration in external conditions may require targeted interventions to protect vulnerable sectors and maintain economic stability.

The Fund’s approach suggests a shift toward more dynamic programme management, where geopolitical risks are integrated into economic assessments. This reflects a broader recognition that global conflicts can have far-reaching consequences for small, open economies like Sri Lanka.

Importantly, the IMF has indicated its willingness to adapt support based on evolving conditions. The mission’s findings will inform how the institution can “best continue to support” Sri Lanka—potentially opening the door to recalibrated targets or additional assistance if risks materialise.

For Sri Lanka, the stakes are high. The success of the IMF programme is closely tied to investor confidence and international credibility. Any external shocks are derailing progress could affect market sentiment, borrowing costs, and access to financing.

At the same time, the situation highlights the importance of building economic resilience. Diversifying remittance sources, expanding tourism markets, and strengthening trade partnerships could reduce dependence on any single region.

As the IMF team prepares its assessment, the central question remains: can Sri Lanka sustain its recovery amid rising geopolitical uncertainty? The answer will not only shape the القادم phase of the IMF programme but also define the country’s broader economic outlook in an increasingly unpredictable world.

Facing relentless electricity cost pressures, Sri Lanka’s plantation industry has embarked on an aggressive transition toward renewable energy and efficiency upgrades. However, despite significant investment and innovation, these efforts are proving insufficient to fully counterbalance the financial burden imposed by rising tariffs.

Over recent years, Regional Plantation Companies have transformed estate operations through a mix of solar, hydro, and biomass energy projects. Leading firms have installed rooftop solar arrays, developed mini-hydro plants, and deployed biogas systems, collectively generating tens of millions of kilowatt hours annually. Some estates now produce more electricity than they consume, exporting surplus power back to the grid.

Companies such as Bogawantalawa Plantations PLC and Talawakelle Tea Estates PLC have committed hundreds of millions of rupees to renewable infrastructure. These investments are complemented by energy efficiency measures, including high-efficiency boilers, variable frequency drives, and advanced energy management systems.

Such initiatives align the sector with global sustainability frameworks, including Science Based Targets initiative and ISO-certified energy standards. By tracking emissions and reducing energy intensity, plantation companies are strengthening their Environmental, Social, and Governance (ESG) credentials an increasingly important factor for international buyers and investors.

However, industry leaders caution that these gains are being undermined by the broader electricity pricing environment. Even with substantial self-generation, plantations remain partially dependent on grid power, particularly during peak processing periods. High tariffs on this residual consumption significantly inflate overall costs.

The absence of a “green tariff” or concessional rate for renewable adopters further complicates the picture. While plantations contribute to national decarbonisation goals and, in some cases, supply excess clean energy to the grid, they receive little recognition in tariff structures. This disconnect reduces the financial returns on sustainability investments and slows the pace of further adoption.

Experts argue that without policy alignment, the sector’s renewable transition risks stalling. High upfront capital costs for solar and hydro projects require predictable payback periods. Escalating grid tariffs, combined with regulatory uncertainty, make it harder for companies to justify additional investments, particularly smaller RPCs with limited access to financing.

The situation also highlights a deeper structural issue: energy policy and export strategy appear to be operating in silos. While Sri Lanka promotes sustainability and climate commitments on the global stage, domestic pricing mechanisms do not fully support industries actively advancing these goals.

A constitutional challenge before the Supreme Court has cast a sharp spotlight on Clause 31 of the proposed Inland Revenue (Amendment) Bill 2026, with critics warning that it could fundamentally alter the balance between administrative authority and judicial oversight in Sri Lanka’s tax system.

At the centre of the dispute is a provision empowering the Commissioner General of Inland Revenue to issue certificates confirming alleged tax defaults? These certificates, under the proposed amendment, would be treated as conclusive evidence in Magistrates’ Courts. The petitioner, chartered accountant Prasad Dasanayaka, argues that this effectively strips courts of their ability to scrutinise the validity or accuracy of such claims.

Legal experts suggest that the clause raises profound constitutional questions. By compelling Magistrates to accept administrative determinations without question, the provision appears to curtail the judiciary’s core function: independently evaluating evidence and adjudicating disputes. The petition contends that this transforms judges into passive enforcers rather than active arbiters, undermining the doctrine of separation of powers.

The constitutional concern hinges on whether such a framework amounts to an impermissible transfer of judicial power to an executive authority. Sri Lanka’s Constitution clearly vests judicial power in courts and institutions established by law, ensuring that disputes especially those involving financial liabilities are subject to impartial review. Critics argue that Clause 31 disrupts this structure by placing decisive authority in the hands of a tax administrator.

Beyond institutional concerns, the clause also raises practical implications for taxpayers. If courts are bound to accept tax default certificates as final, individuals and companies may be left without meaningful legal recourse. Even in cases of calculation errors, disputed assessments, or pending appeals, the inability to challenge these certificates could lead to unjust outcomes, including wrongful penalties or enforcement actions.

Supporters of the amendment may argue that such measures are necessary to streamline tax recovery and reduce litigation delays. Tax authorities often face prolonged legal battles that hinder revenue collection, and granting evidentiary weight to official certifications could expedite enforcement. However, critics counter that administrative efficiency cannot come at the cost of constitutional safeguards.

The broader issue, analysts note, is not merely about taxation but about preserving institutional integrity. If administrative bodies are allowed to issue binding determinations immune from judicial scrutiny, it could set a precedent extending beyond tax law into other areas of governance.

The Supreme Court’s determination on this matter will likely have far-reaching implications. A ruling against the clause could reaffirm the judiciary’s role as a check on executive power, while a decision upholding it may signal a shift toward stronger administrative authority in fiscal matters.

As the case unfolds, it is poised to test the resilience of constitutional principles in the face of evolving governance challenges, particularly in balancing efficiency with accountability

Sri Lanka’s rise to 79th in the global ease of doing business rankings for 2026 signals a recovery in business confidence following a period of economic turbulence. The improved ranking reflects a more stable regulatory environment, supported by easing inflation and declining borrowing costs that have enhanced access to capital for businesses.

Yet, a closer examination reveals that this progress may be masking deeper structural issues that continue to hinder sustainable economic development.

The latest Global Soft Power Index, compiled by Brand Finance, places Sri Lanka at 100th globally, marking a drop from its 97th position in 2025. With a score of 33.8 out of 100, the country’s declining soft power underscores persistent weaknesses in governance and institutional effectiveness.

Soft power plays a crucial role in shaping international perceptions, influencing decisions by investors, corporations, and global institutions. While Sri Lanka has improved its image as a tourist destination ranking higher for its food, friendliness, and overall appeal these gains have not been sufficient to offset declining confidence in governance.

This divergence presents a key challenge for policymakers. While economic stabilisation has improved perceptions of doing business, global views on governance have deteriorated, indicating a disconnect between economic reforms and institutional progress.

For entrepreneurs and investors, this creates uncertainty. Although lower borrowing costs and improved financial conditions make it easier to start and expand businesses, concerns over regulatory consistency and transparency remain significant barriers.

Adding to these challenges is Sri Lanka’s declining global media influence, which fell from 104th to 129th. Reduced international visibility can weaken the country’s ability to promote itself as an investment destination, particularly in an increasingly competitive global market.

Regionally, Sri Lanka’s position also raises concerns. It ranks just below Nepal in soft power, while countries facing greater instability, such as Afghanistan, remain significantly lower. Meanwhile, the United States continues to dominate global influence rankings, highlighting the wide gap Sri Lanka must bridge.

Despite these challenges, Sri Lanka’s strengths should not be overlooked. Its resilience in tourism and people-to-people engagement offers a foundation for rebuilding global trust. Leveraging these strengths, alongside targeted reforms in governance and institutional transparency, could help the country convert its improved ease of doing business ranking into sustained economic growth.

In conclusion, while Sri Lanka’s improved ranking reflects positive momentum, the path forward requires addressing deeper structural issues. Without meaningful governance reforms, the country risks undermining the very progress that has boosted business confidence in the short term.

The government has assured that liquefied petroleum gas (LPG) supplies will remain sufficient in the coming months, based on scheduled shipments by both state and private suppliers.

Cabinet Spokesperson Minister Nalinda Jayatissa said Litro Gas is expecting a 22,000 metric tonne shipment on March 28, followed by another 22,000 metric tonnes in April.

Private supplier Laugfs Gas has also scheduled shipments, including 8,000 metric tonnes on March 30 and 31, and 21,000 metric tonnes between April 25 and 27, he said.

Jayatissa noted that Laugfs typically supplies between 7,000 and 8,000 metric tonnes per month, and that the combined shipments from both suppliers are expected to exceed national demand.

However, he acknowledged that there are ongoing distribution challenges.

Responding to remarks by the President regarding the possible use of Laugfs storage facilities in Hambantota, the minister said discussions are still underway on the matter.

The head of the Iranian Red Crescent Society, Pirhossein Kolivand, has reported extensive damage to civilian infrastructure בעקבות recent attacks, describing them as “alarming acts and war crimes” by Israeli and U.S. forces.

Kolivand called on international bodies to take immediate action to halt attacks on civilians, medical personnel, relief workers, schools and critical infrastructure, and to ensure legal accountability.

According to field assessments, over 81,000 civilian units have been damaged across Iran, including 61,555 residentialand 19,020 commercial units. In Tehran province alone, 24,605 units have been affected.

He also reported damage to key public services, including 275 medical and emergency centres, 498 schools, 17 Red Crescent centres, three helicopters, and 48 operational vehicles, such as ambulances and rescue units.

Kolivand stressed that under international humanitarian law, civilians and essential services—including hospitals, schools and aid workers—are entitled to special protection and must not be targeted.

He warned that attacks on such facilities undermine fundamental humanitarian principles and called for independent and transparent investigations into incidents involving civilian harm.

The Iranian Red Crescent said it is continuing to report damages through international humanitarian channels and urged the global community to take decisive action to protect civilians and uphold international law.

The Welfare Benefits Board has announced that the March allowance for senior citizens over 70 years of age under the first phase of the Aswesuma welfare benefit scheme will be credited on March 26.

Accordingly, 622,462 senior citizens will receive payments under the first phase, with a total allocation of Rs. 3.1 billion.

In addition, under the second phase, 71,339 beneficiaries will receive a total of Rs. 356 million.

The Board stated that the relevant funds will be credited to beneficiaries’ bank accounts on Thursday, and recipients will be able to access their payments from March 26 onward.

President Anura Kumara Dissanayake and Indian Prime Minister Narendra Modi have held a phone conversation to discuss the evolving situation in the Middle East, with particular focus on disruptions affecting global energy security.

In a post on X (formerly Twitter), Prime Minister Modi said both leaders also reviewed progress on key initiatives aimed at strengthening India–Sri Lanka energy cooperation and enhancing regional security.

As close and trusted partners, President Dissanayake and Prime Minister Modi reaffirmed their commitment to work closely together in addressing shared challenges.

Showers or thundershowers will occur at several places in Western and Sabaragamuwa provinces and in Galle and Matara districts after 2.00 pm.

Mainly dry weather will prevail over the other parts of the island.

Misty conditions can be expected at some places in Western, Central, Sabaragamuwa and Uva provinces and in Galle and Matara districts during the early hours of the morning.

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