News & market updates

Sri Lanka's manufacturing PMI rose to 66.7 in March from 56.8 in February, signalling continued expansion driven by seasonal demand. CBSL said all sub‑indices expanded (notably food & beverages and textiles), but firms reported raw material and fuel shortages, rising costs and shipping delays.

IMF/WEO: a Middle East war-driven energy shock is raising inflation and weakening external balances in Asia; the region is projected to grow 4.4% in 2026 and 4.2% in 2027 (from 5% in 2025) under the reference forecast. Higher energy costs hit refiners, utilities, manufacturers and tourism, tightening policy space; adverse/severe scenarios could cut cumulative growth by 1–2 percentage points and lift inflation further.

The U.S. nearly became a net crude exporter last week as exports rose to about 5.2 million bpd and net imports narrowed to 66,000 bpd, driven by supply disruptions from the Iran war. Analysts warn exports are nearing capacity (~6 million bpd) amid tanker and freight limits.

The Sri Lanka–France Business Council hosted its Members' Day at the French Ambassador’s residence where Ambassador Rémi Lambert reaffirmed France's support for Sri Lanka's economic recovery and signalled support across sectors, highlighting maritime and tourism collaboration.

IMF MD Kristalina Georgieva warned policymakers must balance fiscal sustainability with protecting the most vulnerable as West Asia war shocks push up energy prices and slow global growth, and the IMF anticipates $20–50 billion in near-term demand for financial support.

IMF cut its global growth outlook and warned the world is drifting toward a more adverse scenario, saying an adverse path could keep oil near $100/barrel and trim global growth to about 2.5%. It presented three scenarios (reference, adverse, severe) with the severe case pushing oil to $110–$125 and global growth to 2.0%.

IMF warned the US blockade and the Middle East war add fiscal pressure, projecting global growth to slow to 3.1% in 2026 and inflation to rise to 4.4%, while flagging fuel‑price and supply‑chain risks that could worsen the outlook. It also said global debt could reach 100% of GDP by 2029.

IEA, IMF and World Bank issued a joint statement saying the war in the Middle East has driven up oil, gas and fertilizer prices, disproportionately hurting energy importers and threatening food security, jobs and tourism. They said they will coordinate assessments and provide policy advice and financial support.

IMF warned the war on Iran raises global recession risk, cutting global growth to 3.1% in 2026 and lifting 2026 inflation to 4.4%, and presented adverse/severe scenarios with growth as low as 2% and inflation above 6% if energy disruptions persist.

The U.S. military began a blockade of Iran’s ports while hopes for dialogue pushed benchmark oil prices below $100. The blockade heightens uncertainty for global energy supplies and shipping through the Strait of Hormuz.

Fitch warns South and South‑East Asian banks face gradually building credit pressure from a prolonged Middle East conflict, with higher energy prices, supply‑chain disruption and weaker remittances likely to hit retail, micro‑enterprise and SME loan books first.

Mundra Port, operated by Adani Ports, set an Indian record by shipping 6,008 cars on a single vessel, demonstrating RoRo terminal efficiency and reinforcing Mundra's role as a key gateway for India's automobile exports.

Radisson Hotels Sri Lanka has deployed a purpose-built electric van fleet from Evolution Auto (King Long and KYC models) across properties in Colombo, Galle and Kandy for staff transport, property mobility and internal logistics to support sustainability and operational efficiency.

ADB forecasts Sri Lanka's GDP to moderate to 4.0% in 2026 and 4.2% in 2027, with inflation set to rise to 5.2% largely due to the Middle East conflict. The economy remained resilient in 2025 with strong private consumption, record remittances, a primary surplus and higher reserves, but higher energy costs and weaker tourism/trade pose risks.

The ADB forecasts growth in developing Asia and the Pacific will slow to 5.1% in 2026 and 2027 (from 5.4% in 2025), citing the Middle East conflict and trade uncertainty; regional inflation is seen rising to 3.6% in 2026. The report warns of risks from higher energy and food prices, shipping disruptions and tighter financial conditions.

The Trade Ministry will present a record Rs. 629.8m Jayamalle Kapruka Lottery jackpot today, the largest lottery payout in Sri Lanka’s history; the winning ticket was drawn on 19 February 2026 and the cheque presentation will be at the Development Lottery Board auditorium under the minister’s patronage.

Colombo Stock Exchange fell midday with the ASPI down 0.72% to 21,759.64 and market turnover at 773 million rupees. National Development Bank and L B Finance were among top gainers, John Keells and HNB among decliners; Cargills Bank listed 294,200,000 shares after a rights issue raising 2,500,700,000 rupees and Colombo Dockyard appointed Capt Jagmohan chairman.

IMF staff and Sri Lankan authorities reached staff-level agreement on the combined Fifth and Sixth Reviews of the EFF, which, if approved by the IMF Executive Board, would unlock about US$700 million in financing. Approval is contingent on restoring cost‑recovery fuel and electricity pricing and completing financing assurances and debt restructuring.

IMF, World Bank and WFP warned the Middle East war threatens global energy and food security, causing sharp increases in oil, gas and fertilizer prices and rising food insecurity. They said low‑income, import‑dependent countries will be hardest hit and pledged coordinated support to protect lives and livelihoods.

The US and Iran announced a two-week suspension of attacks and Tehran agreed to allow safe transit through the Strait of Hormuz. Iran said it could reopen the strait if a ceasefire framework is reached, a move that could ease disruptions to global oil and gas markets.

Oil tanker traffic through the Strait of Hormuz was halted after Israeli strikes on Lebanon, raising concerns about disruptions to global energy flows.

Operational disruptions at the Department of Motor Traffic are delaying vehicle registrations, with the one-day service stretching to six-seven working days and causing backlogs as imports reopen. Monthly registrations and import values have cooled (Feb registrations 51,682; vehicle imports $194m).

A parliamentary oversight committee has summoned the Ports Ministry over non-compliance and persistent losses at regional ports, despite the SLPA reporting 2025 PBT of Rs.56bn (+20%) and net profit of Rs.42bn (+111%). The committee flagged losses at Galle (≈Rs.200m) and KKS and signalled RFPs for private participation.

Sri Lanka's recovery from Cyclone Ditwah has slowed, with more than 149,000 people still displaced and $23.4m pledged of the $35.3m required for the humanitarian plan. OCHA warns rising fuel and energy costs, supply-chain disruptions, heat-reduced hydro output and funding gaps risk food security, livelihoods, tourism and resettlement.

Colombo Dockyard PLC appointed Capt. (Retd.) Jagmohan as Non-Executive Chairman and added Vish Govindasamy and Senthilverl Nandhanan to the Board after Mazagon Dock Shipbuilders acquired a 51% stake; Thimira S. Godakumbura remains Managing Director & CEO.

Colombo market recorded its largest single-day gain as the ASPI rose 4.21% (885.14 pts) to 21,917.60 on Middle East ceasefire optimism; turnover was over Rs.6.6bn and foreigners were net sellers of Rs.612.4m. JKH, COMB, HNB, DIAL and DOCK were top contributors and the banking sector led turnover (24%).

Colombo Stock Exchange ASPI rose 4.21% to 21,917.60 as a US two-week ceasefire announcement drew investors back, with turnover at Rs.6.61 billion and banks driving activity. Top contributors included John Keells, Commercial Bank, Hatton National Bank, Dialog Axiata and Colombo Dockyard.

Colombo Dockyard (DOCK.N0000) signed an MoU with Dredging Corporation of India to provide dry-docking, repair and upgrade services for DCI's dredger fleet, expected to boost Indian-linked business volumes following Mazagon Dock's 51% stake in Colombo Dockyard.

Brent rose $1.74 to $111.51/bbl and WTI rose $3.45 to $115.86/bbl as the Strait of Hormuz remained shut ahead of a U.S. deadline, with Iran rejecting a ceasefire and supply disruptions from Gulf exporters squeezing global crude flows.

Global oil prices briefly surged past $110 per barrel after US President Donald Trump warned of strikes on Iranian infrastructure over disruptions in the Strait of Hormuz, then eased as reports of possible ceasefire talks emerged, leaving supply uncertainty and market volatility elevated.