Sri Lanka’s economic growth is expected to moderate to 4.0% in 2026 and climb to 4.2% in 2027, following two consecutive years of strong 5.0% growth. This forecast is based on an early stabilization scenario for the Middle East conflict, according to the Asian Development Outlook (ADO) April 2026, Asian Development Bank’s (ADB) flagship economic publication….
Economic growth in developing Asia and the Pacific is expected to slow to 5.1% in both 2026 and 2027, from 5.4% last year, weighed down by the conflict in the Middle East and continuing trade uncertainty, according to the latest forecasts by the Asian Development Bank (ADB). Regional inflation is projected to rise to 3.6%…
By Prof. Samitha Hettige In the early 1980s watching Sadam of Iraq attacking Iran was fun for some westerners as they backed him during Gulf War I. Iranians reversing the ‘White’ revolution which privatized the nationalized petroleum of Iran may have been the reason. Later when Sadam invaded Kuwait, his western friends killed him even…
The Executive Board of the International Monetary Fund (IMF) discussed the IMF staff policy paper on Understanding Global Imbalances on Wednesday, April 1, 2026. Against the backdrop of persistent and recently widening global imbalances, the paper presents a structured framework for understanding how domestic policies can influence current account positions by altering domestic saving and…
Energy prices, supply chains, and financial markets are the main transmission channels, but the regional effects will vary significantly Tobias Adrian, Jihad Azour, Nigel Chalk, Pierre-Olivier Gourinchas, Alfred Kammer, Abebe Aemro Selassie, Krishna Srinivasan, Rodrigo Valdés The world faces yet another shock. The war in the Middle East is upending lives and livelihoods in the region and beyond. It is also dimming…
Business Sentiment – Geopolitics Clouds BIZ Confidence March brought a wave of challenges that spilled over from extreme tensions in the Middle East into Sri Lankan waters, raising concerns about the island’s economic outlook and hinting at potential difficulties in the months ahead. The ripple effect of escalating tensions between the US-Israel combine and Iran –…
By Prof. Samitha Hettige Finance Minister J.R. Jayawardena (JRJ) (1906 – 1996) was 45 years old when he proposed to pardon Japan at the 1951 San Francisco Peace Conference. Even he wouldn’t have imagined that Japan would reciprocate the honour with the Sri Jayawardenepura General Hospital (SJGH) with 1001 beds 27 years later. At the…
The effects of higher oil prices and declining equity markets would be the main drivers of the negative global economic impact from an adverse scenario in which the Iran conflict continued until end-1H26, Fitch Ratings says. Our cross-sector analysis shows that global real GDP would be about 0.8% lower after four quarters compared to our…
Sri Lanka’s total exports, including both merchandise and services, reached US$ 1,401.78 million in February 2026, reflecting a notable year-on-year growth of 4.22% compared to February 2025. According to provisional data from Sri Lanka Customs, along with estimated figures for Gems & Jewellery and Petroleum Products, merchandise exports for February 2026 increased by 1.32% to…
By Bilesha Weeraratne, Research Fellow, Institute of Policy Studies of Sri Lanka With the ongoing conflict in the Middle East (ME), Sri Lanka finds itself at a particularly vulnerable juncture as it carefully navigates a fragile economic recovery. Labour migration offers jobs to counteract the lack of opportunities within the economy. Related micro-level remittances prevent…
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