Reply To:
Name - Reply Comment
Pic by Priyantha Bandara
By Shabiya Ali Ahlam
Sri Lanka’s private sector enters year 2025 with optimism as the island nation has somewhat managed to emerge from years of economic turbulence, supported by signs of recovery and a more stable environment.
While challenges still remain in different forms, businesses and economists alike are confident that 2025 holds the promise of sustained growth, provided key reforms and measures stay on track.
Speaking to the leading business representatives across diverse sectors, Mirror Business gathers that the sentiment is broadly positive. This is driven by a favourable combination of economic developments.
Business leaders highlighted the importance of continuing the International Monetary Fund (IMF) reform programme, maintaining a low-interest-rate environment, and benefiting from a stable currency and single-digit inflation.
“Sri Lanka has to stay on course and continue its reform programmes while doing targeted stimulus to important sectors through enhanced revenue collections. One has to bear in mind that Sri Lanka is still not ready for a big external shock.
“Maintaining national security, managing geopolitics, enhanced revenue measures through digitisation and efforts on reducing corruption would be key to achieve our goals,” said Sri Lanka Banks’ Association (SLBA) Chairperson Bingumal Thewarathanthri.
According to economist and Verite Research Executive Director Dr. Nishan de Mel, the upcoming budget will be a key indicator of whether Sri Lanka is on the path to sustainable progress or falling back into old patterns.
Business leaders also see 2025 as an opportunity for innovation and sustainable growth. John Keells Holdings Chairperson Krishan Balendra noted that for companies, it is the time to invest in technology, adaptability, and sustainable practices.
“All industries have a chance to prosper as Sri Lanka recovers from the economic crises - the macro fundamentals are in place for a period of sustained growth. As a close neighbour of India, which is the fastest growing big economy in the world, there are many opportunities for Sri Lanka, especially in tourism and ports and logistics,” he said.
It must be acknowledged that Sri Lanka ends 2024 on a markedly improved footing. The country secured its first credit rating upgrades since the debt restructuring process, with Fitch Ratings and Moody’s recognising the nation’s progress. The successful conclusion of the foreign currency debt restructuring, with near-full acceptance of new bonds, marked a step toward restoring financial stability after over two years of default.
On the economic front, Sri Lanka recorded a 5.5 percent growth in the third quarter of 2024 compared to the same period in 2023. This acceleration, up from 4.7 percent in the second quarter, was driven by rising credit flows to the real economy and easing interest rates, which boosted economic activities. Additionally, national consumer prices continued to decline for the third consecutive month in November, easing inflationary pressures on households and businesses.
It also must be noted that the road to recovery has been far from smooth. Following the dual shocks of the Covid pandemic and the economic crisis, ri Lanka implemented painful reforms that strained both businesses and individuals.
High costs of living and production, coupled with lingering restrictions, remain significant hurdles. However, the country’s progress in stabilising its economy and laying the groundwork for growth has positioned it in a better place than it was a year ago.
Read ‘New Year. New Challenges. New Opportunities’ on page 16 and 17 for comments from business leaders on their expectation and outlook for 2025
https://www.dailymirror.lk/business-news/New-Year--New-Challenges--New-Opportunities/273-299209
