Sri Lanka’s economy showed strong momentum in March 2025, with both the Manufacturing and Services Purchasing Managers’ Indexes (PMIs) signaling significant expansions.

The Manufacturing PMI surged to 63.9, marking the highest index value in four years. This growth was fueled by month-on-month improvements across all sub-indices, primarily driven by seasonal demand. For context, the PMI values were 56.8 in February and 59 in January, compared to 57.2 in December 2024—highlighting a steady upward trend.

Key drivers behind this robust performance were manufacturers in the food & beverages and textile and apparel sectors. These industries led strong increases in both New Orders and Production, underlining their responsiveness to heightened consumer demand. Additionally, increases in Employment and Stock of Purchases reflected firms’ proactive measures to meet production needs.

However, not all indicators were entirely positive. Suppliers’ Delivery Time continued to lengthen, suggesting that supplier networks are under mounting pressure due to the surge in demand.

Despite logistical challenges, the outlook for manufacturing remains optimistic over the next three months. That said, the Central Bank of Sri Lanka (CBSL) noted concerns among export-oriented firms regarding ongoing global trade uncertainties.

The Services PMI also recorded strong growth, reaching 69.8 in March—up from 56.5 in February and 58.5 in January. While slightly below December’s 71.1, this still indicates robust expansion, particularly during the festive period.

Several sectors contributed to this growth. Wholesale and retail trade activities expanded sharply, bolstered by seasonal shopping trends. Financial services also performed well, aided by increased lending, while sectors such as professional services, personal care, insurance, and hospitality reported notable gains.

New business generation was on the rise, especially in finance, retail, insurance, and hospitality-related services. Reflecting this, many firms increased hiring to support the seasonal surge, which in turn contributed to improved employment figures.

Meanwhile, backlogs of work continued to decline, though the rate of reduction was slower in March—possibly indicating a balance between improved operational capacity and sustained demand.

Looking ahead, business sentiment remains generally positive, although expectations are slightly tempered by concerns over US-imposed import tariffs and their potential ripple effects on local service providers and exporters.

In summary, March 2025 was a standout month for Sri Lanka’s economy, characterized by a resurgence in manufacturing and services, underscored by seasonal demand and cautious optimism for the quarter ahead.

The International Monetary Fund (IMF) has commended Sri Lanka’s ongoing economic recovery under the Extended Fund Facility (EFF), highlighting notable progress in growth, inflation control, and foreign reserves. However, the IMF also emphasized that global economic uncertainty, limited fiscal flexibility, and incomplete structural reforms pose significant threats to sustaining these achievements. Strong policy implementation and focused support for vulnerable groups remain critical.

These insights followed an official IMF mission led by Evan Papageorgiou, which visited Colombo from April 3 to 11. After a series of productive discussions, Papageorgiou issued a statement praising the outcomes of Sri Lanka’s ambitious reform strategy under the EFF.

He noted that the nation is rebounding from its recent economic crisis, with a projected growth rate of 5% for 2024. Inflation has dropped significantly, reaching 2.6% by the end of March 2025. The Central Bank’s proactive foreign currency acquisitions have helped increase gross official reserves to $6.5 billion by the same period. Additionally, comprehensive fiscal reforms have helped strengthen public finances.

Despite these successes, the IMF expressed caution regarding recent global developments that could disrupt Sri Lanka’s economic stability. The external environment, coupled with domestic challenges, requires close monitoring and swift responses to avoid reversing progress.

The IMF emphasized the importance of the government’s continued commitment to the reform agenda. Maintaining this momentum is essential to preserving gains and achieving long-term macroeconomic stability and inclusive growth.

The Fund called for enhanced revenue generation, especially through improved tax compliance. One proposed step includes restoring a prompt and efficient VAT refund mechanism, which would increase revenue without the need for new tax hikes.

 The IMF also warned against introducing new tax exemptions, which could lead to revenue losses and heightened corruption risks. Instead, creating fiscal buffers to protect the most vulnerable should be prioritized.

Another recommendation was to return to cost-recovery pricing in the electricity sector, which would reduce the financial burden on state-owned enterprises and the national budget. Furthermore, the IMF stressed the importance of strengthening social safety nets. Assistance programs must be accurately targeted, adequately funded, and time-bound to ensure efficient use of limited resources.

While inflation is currently under control, continued surveillance is necessary to ensure long-term price stability. The IMF also encouraged the Central Bank to keep building external reserves to buffer against potential shocks.

The delegation held high-level meetings with President and Finance Minister Anura Kumara Dissanayake, Prime Minister Dr. Harini Amarasuriya, and other key government figures, including Central Bank Governor Dr. Nandalal Weerasinghe and Treasury Secretary Mahinda Siriwardana. They also consulted with parliamentarians, private sector leaders, civil society organizations, and development partners.

Concluding the visit, the IMF team expressed appreciation for the government’s cooperation and reaffirmed its support for Sri Lanka. Ongoing discussions aim to reach a staff-level agreement soon, which would pave the way for completing the fourth review of the EFF program. The IMF underscored its continued commitment to aiding Sri Lanka during this critical period.

Prime Minister Dr. Harini Amarasuriya reaffirmed the Government’s commitment to transparent governance, economic revival, and rural development, while assuring the public that corruption, fraud, and mismanagement have been decisively halted.

Speaking at a public event at the Pullman Grand Hall in Kolonnawa on Wednesday (April 16), the Prime Minister emphasized that the current administration and Cabinet are fully capable of fulfilling their duties without burdening the nation.

“It is now time for all of us to work together to rebuild the country. I wish you the strength and courage for this shared mission,” she said.

Six Months of Transformation

Reflecting on the Government’s first six months in office, Dr. Amarasuriya noted the difficult conditions under which the NPP-led administration assumed power, and highlighted the urgent need for systemic change following decades of political stagnation.

“The people elected us because they believed in the need for a new political culture,” she said. “Our first priority was stabilising the economy – a task we took on despite warnings from opponents that our leadership would lead to collapse. Today, we’ve proven otherwise.”

She highlighted that fears among business leaders and international institutions about economic instability have subsided, with investor confidence steadily growing and new projects being introduced.

“Our goal this year is to bring in three million tourists. During my recent visit to Europe, there was strong interest in investment opportunities in Sri Lanka,” she said.

Budget Focused on Rural Development

The Prime Minister also pointed to the recent budget as a turning point in delivering tangible benefits to rural communities. A significant portion of funding has been allocated to districts and provincial councils, she said, under strict accountability.

“Development funds should benefit the people – not end up in private pockets. That’s why this election is so critical. We need strong, transparent local leadership to ensure these funds are properly utilised,” she stressed.

She also noted that NPP candidates are held to strict disciplinary standards, ensuring integrity and accountability.

“If any group can ensure that Kolonnawa’s development funds are used for the people, it is the NPP. That assurance cannot be given by any other party,” she added.

Economic, Social and Law Enforcement Reforms

While acknowledging the ongoing economic challenges — including high prices and limited job opportunities — Dr. Amarasuriya expressed confidence that the Government’s production-based economic strategy and foreign investment efforts are beginning to yield results.

She also spoke candidly about organised crime and narcotics, noting that long-standing protection networks are being dismantled.

“We’re ending the political protection that allowed drug networks to thrive. Even within the Police, those involved are being identified and stopped. We will not let our youth be destroyed by drugs,” she said.

The Importance of the Upcoming Election

The Prime Minister concluded by underscoring the significance of the upcoming local government election on May 6, which she described as a key moment in the country’s transformation journey.

“This election is about more than local councils. It’s about ensuring that the path we’ve begun—towards transparency, accountability, and real progress—is protected and continued.”

China is committed to supporting Sri Lanka’s development and strengthening bilateral ties, Chinese Ambassador to Sri Lanka Qi Zhenhong stated in a recent release, as global trade tensions intensify.

Addressing growing concerns over protectionism and unilateral tariff measures, Ambassador Qi emphasized the importance of multilateralism, economic cooperation, and a fair global trading system. He reaffirmed China’s readiness to collaborate closely with Sri Lanka to resist economic coercion and promote mutual development.

“China-Sri Lanka relations are a model of South-South cooperation,” he said. “Both nations are well-positioned to build a shared future based on mutual benefit, respect, and stability.”

Criticism of US Tariff Policies

Ambassador Qi strongly criticized the United States’ tariff actions, warning of their potential to destabilize the global economy, particularly in developing nations. He referred to the U.S. decision to impose “reciprocal tariffs” on all trading partners, including China and Sri Lanka, as a reckless move that defies market principles and undermines international trade norms.

“The U.S. has long profited from international trade, occupying the high end of the industrial chain. Meanwhile, developing countries like China and Sri Lanka have provided high-quality, low-cost goods, often under Western company brands. Weaponizing tariffs for selfish interests contradicts the very principles the U.S. once championed,” Qi noted.

He warned that such policies risk triggering global economic uncertainty and even recession, particularly harming Global South economies that rely on stable trade access.

China’s Vision for Multilateralism

Reaffirming China’s commitment to openness, Qi stated that Beijing will continue to expand high-standard opening up, promote trade and investment liberalization, and share development opportunities with global partners.

“Multilateralism is the only path to overcome global challenges. China, as the second-largest economy and market for consumer goods, will remain a firm supporter of the international trading system,” he said.

He stressed that China and Sri Lanka’s partnership, rooted in historical friendship and shared development goals, will continue to flourish. Under the guidance of Presidents Xi Jinping and Anura Kumara Dissanayake, he said the two nations will work to build a “China–Sri Lanka community with a shared future,” enhancing regional cooperation and prosperity.

Sri Lanka welcomed 816,191 tourists from January 1 to April 15, 2025, reflecting a strong recovery in the tourism sector following the country’s unprecedented economic downturn.

According to statistics from the Sri Lanka Tourism Development Authority (SLTDA), India emerged as the top source market, contributing 136,535 visitors. Russia followed closely with 102,273 tourist arrivals during the same period. These two countries also led the tourist arrival figures for March, securing market shares of 17.1% and 12.7% respectively.

Tourist arrivals from the United Kingdom reached 22,447 in March 2025, up from 21,540 during the corresponding period last year. For the first fifteen days of April, Sri Lanka recorded 93,915 arrivals. Of these, 18,220 were from India, accounting for 19.4% of the total, while the UK, Russia, Australia, and Germany contributed 11,425, 8,705, 6,604, and 7,746 arrivals respectively.

From January to March, the data shows dynamic growth across several source markets. India continued to dominate with 118,315 arrivals—representing a 22.9% year-over-year increase—driven by geographic proximity and cultural ties. Russia retained a strong position with 93,568 visitors, though its growth was more modest at 2.6%.

European markets showed mixed but largely positive trends, with France and the Netherlands recording significant growth of 30.0% and 38.0% respectively. This surge is likely attributed to improved flight connectivity, higher disposable incomes, and successful promotional campaigns.

Tourist arrivals from the United Kingdom and Australia also surged, growing by 18.5% and 25.7% respectively, indicating growing appeal across diverse demographics. However, arrivals from China declined by 7.3%, pointing to ongoing post-pandemic recovery challenges or intensified competition from alternative destinations.

Emerging markets such as Poland (11.6% growth) and the United States (11.3%) also posted promising gains, signaling a broader diversification of Sri Lanka’s tourism base.

Defence Secretary Air Vice Marshal Sampath Thuiyakontha convened a special meeting on April 17, instructing the Commanders of the Tri-Forces to implement a comprehensive security programme ahead of Easter Sunday.

The measures, he said, must be carried out in close coordination with the Ministry of Public Security to ensure effective execution.

Emphasizing the need for a peaceful and secure environment for religious observance, the Defence Secretary noted that the initiative is aimed at preventing any disruptions similar to the tragic Easter Sunday attacks of 2019.

He stressed that Christians must be able to attend services without fear or inconvenience.

The President’s Media Division (PMD) has issued a warning to the public regarding a fraudulent invitation being circulated ahead of the “Siri Dalada Wandanawa” (Exposition of the Sacred Tooth Relic).

According to the PMD, the fake document falsely claims to be issued in the name of the Secretary to the President, Dr. Nandika Sanath Kumanayake, and instructs recipients to report to the President’s House in Kandy to attend the inauguration ceremony.

The PMD clarified that no official invitations have been issued to individuals for the event and dismissed the invitation as entirely fraudulent.

The statement further denied rumours circulating on social media that a special VIP queue has been arranged for the exposition based on this forged invitation, stressing that such claims are baseless and misleading.

Finland has topped the World Happiness Rankings for the eighth year running – but the real appeal for travellers lies in the country’s deeply-lived values of balance, nature and everyday contentment.

Finns tend to accept the accolade of supreme happiness, bestowed on them by the UN’s World Happiness Report in March 2025 for the eighth time in a row, with a collective shrug and eye roll. But Finnish travel operators are celebrating as travellers increasingly make the connection between Finland and happiness, hoping to come and experience that Finnish brand of happiness for themselves.

However, don’t expect to be greeted with howls of laughter and cheerful quips when you land at Helsinki Airport or disembark from one of the Baltic ferries in the capital’s harbour. There is some truth in the perception of Finland being a no-nonsense, down-to-earth kind of nation. Generally, Finns are flattered – happy, even – to be honoured by the report’s conclusions, but while graciously accepting them, they feel “happiness” isn’t really the right word. Instead, “contentment”, “fulfilment” or “life satisfaction” are widely considered more appropriate terms. As Finnish President Alexander Stubb recently posted on Facebook: “No one can be happy all the time, and sometimes circumstance makes it difficult. But getting the basics right – security, freedom and equality – is a good start.”

But while the concept of happiness in Finland may be nuanced and culturally specific, it is deeply embedded in the fabric of daily life. Rather than seeking constant highs, the Finnish approach is rooted in balance, connection and quiet contentment – qualities that increasingly resonate with visitors. And for travellers, this state of being is not just something to observe but one to get involved with first-hand, through embracing the country’s nature, sauna culture, food, sustainable design and lifestyle.

“We see Finnish happiness as a summary of these five elements,” says Teemu Ahola, director of international operations at Visit Finland, “but we don’t measure or collect data to evaluate happiness as a single attraction in itself”.

To experience these tangible, authentic aspects of Finnish life that underpin its consistent happiness ranking, Ahola suggests Finnish sauna culture as an increasingly popular, most globally identifiable attraction; and stresses that Finland is a safe country, naming the risk of bumping into free-roaming reindeer in northern Lapland as one of the few potential hazards for visiting tourists. Meanwhile, he adds, a new and confident generation of Finnish chefs has earned international respect for and interest in the Finnish culinary scene.

2025’s Happiest Countries

The 2025 top 10 happiest countries, in descending order, consist of Finland, Denmark, Iceland, Sweden, the Netherlands, Costa Rica, Norway, Israel, Luxembourg and Mexico. The Report’s findings are based on Gallup poll scores for inequality (or absence thereof), social support, GDP per capita, life expectancy, freedom, generosity, perceptions of corruption, positive emotions, and willingness to donate and volunteer. “Caring and Sharing” were chosen as general themes for the 2025 report, timely reminders of the societal virtues of empathy and community. 

Finland is home to the world’s northernmost Michelin star restaurant, Tapio, in Ruka-Kuusamo; and the Saimaa Lakeland region was named a European Region of Gastronomy in 2024. Many restaurants across Helsinki celebrate the edible riches – mushrooms, berries, fish and game – that are accessible to all in the country’s endless forests, coastal archipelagos and inland waterways through Finland’s Jokaisenoikeudet or “Everyman’s Right”, a law that grants everyone the freedom to roam and forage.

Connect with nature

Helsinki, where most visitors start or end their trip, offers a first-hand glimpse of this national contentment. This is a seaside city, spread over a beautiful natural archipelago and reclaimed land. It’s easy to grab a city bike from one of the dozens of stands around town and head off to explore the coast-hugging cycling routes or disappear into Central Park, a belt of forest that stretches from the city centre to its northern periphery.

The endorphin boost experienced by this kind of freewheeling adventure and access to plentiful natural resources ties directly into the UN’s happiness metrics of life expectancy, freedom and positive emotions. This connection can be found at the heart of SaimaaLife, a nature and wellness company in eastern Finland’s sprawling Saimaa Lakeland region, run by mental health expert and guide Mari Ahonen.

Ahonen is an enthusiastic advocate of the mental balance that Finnish nature and lifestyle have to offer and leads her guests through shinrin-yoku (forest bathing), traditional lakeside saunas, wild swimming, foraging trips for mushrooms and berries and cooking over an open fire.

“We Finns can be too modest,” she says. “We should notice the World Happiness status in a positive way. I’m a living example of having been able to develop a business with the support that has been available for my entrepreneurship. Some people say it’s a lottery win to be born in Finland.” 

A lottery win, that is, in the form of life satisfaction and balance; of living comfortably and having “enough” in a material sense. This ceiling of expectation shouldn’t be confused with a lack of ambition or resourcefulness. After all, this is the birthplace of mobile communications pioneer Nokia, the distinctive garden tool and scissor brand Fiskars and textile and clothing icon Marimekko. 

Stoic and stubborn

Finland isn’t immune from economic pressure or controversies, however, and the long, dark winters can put a strain on mental health. The Finnish idea of happiness also includes a dose of sisu: a hard-to-translate concept of resilience, fortitude, courage and grit. Finnish-Canadian author Katja Pantzar, who has written extensively about this perceived national quality, explains that it’s “a mindset that allows people and communities to work together in the face of challenges rather than give up or blame and attack others”.

She notes that the top four nations in the World Happiness Report are all Nordic countries with strong welfare systems designed to support the collective good. “Happiness is very culturally specific,” she said. “In Finland, there are many examples of everyday happiness that are available and accessible to everyone, whether it’s nature – every person in Finland is on average about 200m from the nearest forest, park, seashore or natural body of water – saunas, public libraries, safe and efficient public transport, free clean drinking water, education or healthcare.”

Pantzar also highlights the mood-boosting properties of contrast therapy – hot saunas followed by cold dips – as an accessible, every-day mood booster. “It’s incredibly easy to do in Helsinki, surrounded by the sea,” she says. “When you don’t need to travel great distances or pay large fees to have a quick dip, it’s easier to do more regularly, before or after work or on your lunch break.” 

And while some Finns remain sceptical of the “happiest nation” label, most seem to appreciate what they have. “I don’t find it easy to think of Finland as the happiest country in the world,” says pensioner Juha Roiha. “In poorer countries like Thailand and Nepal, people seem relaxed in spite of any hardship. In Finland, you might sometimes hear people say that they’d be happier somewhere else. But within ourselves, with what we have, we’re happy.”

Happy Land – Finding the Inner Finn, a travel memoir by Tim Bird, will be published by Eye Books in the UK in January 2026. It takes a “sideways” look at Finland’s happiness status.

BBC

Opposition Leader Sajith Premadasa has sharply criticized President Anura Kumara Dissanayake over recent comments suggesting that the allocation of government funds to local councils may depend on which party controls them.

Speaking earlier today, President Dissanayake stated:
“Before allocating funds, we have to inquire who is sending the proposal. If the Mannar Urban Council is with the NPP, then we will allocate funds with our eyes closed. However, if it is with another party, we will have to study the proposal at least 10 times. Why is this? Because we are not sure of those people.”

In response, Premadasa condemned the statement, calling it a blatant attempt to mislead the public and an example of “cheap political gimmicks.”

“This kind of politics is short-lived. The President is trying to fool the people by implying that only NPP-controlled councils will receive funding. Don’t be discouraged by such petty political intimidation,” he said.

The Department of Meteorology has issued a warm weather advisory for residents in the Northern, North-Central, North-Western, Western, Southern, and Eastern provinces, as well as the Rathnapura and Monaragala districts.

The heat index — the temperature as felt by the human body due to humidity and actual temperature — is expected to reach the ‘Caution Level’ in several areas today (April 18).

“This is the condition your body actually feels, not just the recorded air temperature,” the Met Department stated.

Authorities warn that prolonged sun exposure and outdoor activity may lead to fatigue and, if continued, can cause heat cramps.

Residents are urged to stay hydrated, avoid strenuous outdoor activities, and take necessary precautions to protect themselves from heat-related health risks.