News & market updates

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.

Planters' Association warns fertilizer shortages caused by Middle East disruptions and closure of the Strait of Hormuz could cut Sri Lanka plantation yields over the next 2–4 months; government raised fertilizer subsidy to Rs.18,000 and a 25,000MT urea shipment is expected but will cover only a small fraction of needs.

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.

Planters’ Association warns that Middle East conflict and Strait of Hormuz disruptions are restricting fertiliser supply and could hit plantation crop yields over the next 2–4 months, raising production costs and threatening export earnings. Government raised a fertiliser subsidy to Rs.18,000 and a 25,000 MT urea shipment is expected this week, but PA says this will meet only a fraction of needs.

Four SLIIT Business School graduates converted their final-year theses into four Q1-ranked, Scopus-indexed international journal publications. The research examines how countries can manage globalisation for sustainable growth, offering policy recommendations on trade, FDI, governance, human capital and digital infrastructure.

The IMF and Sri Lankan authorities reached a staff-level agreement on the combined 5th and 6th reviews of the EFF that, if approved by the Executive Board, would unlock about US$700m, conditional on restoring cost‑recovery fuel and electricity pricing, financing assurances and debt restructuring. The IMF also urged rebuilding reserves with exchange‑rate flexibility, fiscal and revenue reforms, stronger social safety nets, and progress on NPLs and governance reforms.

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.

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.

Author urges Sri Lanka to expand QR digital payments and deepen economic cooperation with China (including Belt & Road) to bolster economic stability amid energy-market shocks from US–Iran tensions and shifting global currency/gold dynamics.

National tea sales average fell for a third straight month in March to Rs. 1,144.23 ($3.63), down Rs. 7.88 from February and Rs. 57.35 from the December 2025 peak. The Jan–Mar 2026 average was Rs. 1,153.25, down Rs. 26.07 from the same period in 2025.

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.

IMF Executive Board on Apr 1, 2026 reviewed the staff paper 'Understanding Global Imbalances', finding domestic macro policies are the main drivers of current‑account imbalances and that coordinated domestic rebalancing across countries is needed to reduce imbalances and support global growth.

Hambantota International Port doubled its RoRo yard capacity and increased container yard capacity by 30% to handle a surge in shipping volumes triggered by the Middle East crisis. Yard utilisation is at record highs as vessels divert from disrupted routes, reinforcing HIP's role as an alternative transhipment hub near the main East–West route.

BOI held a full-day FDI promotion session with a 15-member Malaysian delegation to showcase ready projects, land and infrastructure for immediate investment, drawing interest in ICT/data centers, solar renewable energy, manufacturing, FMCG, agri-processing and tourism.

Hambantota International Port doubled its RoRo yard capacity and increased container yard capacity by 30% after a surge in shipping volumes driven by the Middle East crisis. Yard utilisation reached record highs as vessels diverted from disrupted routes, boosting HIP's role as a regional transhipment hub.

Hyundai Motor warned exports to Europe and North Africa are being disrupted by the Middle East conflict, choking shipping routes, raising logistics costs and delaying deliveries. Hyundai Glovis said some Middle East routes are inaccessible and cargo is being rerouted to hubs such as Sri Lanka.

The UK’s revised Developing Countries Trading Scheme (DCTS), effective January 2026, eases rules of origin and sourcing requirements, giving Sri Lanka’s apparel sector—especially SMEs—greater flexibility to source inputs, improve pricing, shorten lead times and boost competitiveness in the UK market.

The World Bank Group and the Government of Sri Lanka launched a five-year Country Partnership Framework mobilizing more than $1 billion in IFC investment and up to $1 billion in low-interest World Bank financing to support private-sector-led job creation and growth. The program targets easier business rules, port and energy infrastructure (70% renewables by 2030, +1 GW), tourism and agriculture support, and a first $100m REVIVE project to create about 3,000 jobs in the Northern and Eastern provi

Sri Lanka and the World Bank Group launched a five-year Country Partnership Framework mobilising over $1bn in IFC investment and up to $1bn in low-interest World Bank financing, with a first approved $100m REVIVE project for the Northern and Eastern Provinces. The plan targets easier business rules, Port of Colombo expansion, 1 GW of new clean power by 2030, tourism and agriculture job creation, and climate resilience.

Commercial Bank of Ceylon won the overall Gold Award for 'Excellence in Digital Payments (Banks)' at the LankaPay Technnovation Awards 2026 and secured six awards in total (four Gold, one Silver, one Merit). The accolades reflect 2025 transaction growth and digital initiatives including Google Pay, an AI SME credit model, the TradeLink trade finance platform and an agency banking rollout.

Pan Asia Bank served as a Strategic Partner of the National Chamber of Exporters' Export Awards, reaffirming its commitment to support Sri Lankan exporters by facilitating access to finance and promoting competitiveness and sustainable international expansion.

EDB convened CPC and a broad cross-section of exporters to address fuel accessibility and distribution bottlenecks; CPC agreed to facilitate direct dialogue to establish a reliable, prioritized fuel supply mechanism for export-oriented industries including apparel, electronics and pharmaceuticals.

The EDB convened a high-level meeting with the Ceylon Petroleum Corporation and export industry stakeholders to tackle fuel distribution problems affecting exporters; CPC agreed to engage directly with the private sector to improve prioritised and coordinated fuel supply.

The IEA, IMF and World Bank have formed a coordination group to align analysis and mobilize support for countries hit by the Middle East war's energy and economic shocks, prioritizing low-income energy importers and assessing energy prices, trade flows, inflation and financing needs. The group may provide targeted policy advice, concessional financing and risk-mitigation tools.

Morison, a subsidiary of Hemas Holdings, invested LKR 4 billion in a world‑class Pitipana manufacturing facility and is shifting focus to build branded, high‑quality affordable pharmaceuticals with EU‑GMP targets and export ambitions. Management cites policy, regulatory consistency and tax reforms as key enablers for long‑term viability.

DFCC Bank participated in the Ceylon Chamber of Commerce Export Acceleration Program, highlighting sharper currency volatility, payment risks and shifting trade dynamics that are pushing exporters to seek integrated treasury, trade services and advisory support. The bank said exporters are pursuing more measured, disciplined growth.

CFA Society Sri Lanka and Frontier Research will host an evening discussion, “Resilience on the line: Evaluating Sri Lanka’s macro stability amid global shocks,” on 9 April 2026 (5–7 p.m.) at Courtyard by Marriott, Colombo City Centre. Speakers will cover risks including oil price shocks, shipping disruptions, weaker global growth and tighter financial conditions.