New Year New Challenges New Opportunities

Business leaders welcome 2025 with hope, strategy and caution

As 2024 came to a close, Sri Lanka made significant progress in addressing, to a great extent, some of the critical issues that plunged the nation into crisis.

The journey was far from easy and it was the business community that shouldered much of the burden of the economic reforms necessary to stabilise the country.

Now, with the ‘bankrupt nation’ label beginning to fade, Sri Lanka’s business leaders enter 2025 with cautious optimism. Their outlook is measured hopeful for growth, yet tempered by the realities of global uncertainty and lingering domestic challenges.

Speaking exclusively to Mirror Business, industry leaders and key representatives of the chambers and associations revealed their expectations for 2025, along with the hurdles they expect and their strategies to navigate the year ahead.

Following are the excerpts from their comments:

Sri Lanka Banks’ Association Chairperson Bingumal Thewarathanthri

Sri Lanka did not have political stability for a long time. Vulnerable governments have led to weak economic policies and policy inconsistency. Coming from such a backdrop, what Sri Lanka has achieved in the last couple of years is commendable. With a strong mandate given to the current government, there is no better time to have good policies that work for the long-term growth and drive policy consistency. This will activate our FDI pipeline that has been weak for a very long time. 
We expect the government to take a long-term view and fix some of the structural issues to convert this country into an export-led economy. Some amount of stimulus to lucrative sectors will be key. In 2025, we look forward to a strong public digital infrastructure that will enable broadening the tax base and reduce government debt. 
The banking industry has faced many challenges and has come out strong, due to its well-managed risk culture and continuous transformation to digital. Still the NPL ratio hovers above 12 percent and the sector has to bring this down gradually. The industry is not ready for any kind of external shock or restrictions to its recovery actions. Maximising its business revival units and bringing the stress businesses back into action, cybercrime and anti-money laundering will be three big issues to manage in 2025, while building up capital buffers to face new large exposure policy that will come to effect in 2026. 
With the recent rating upgrade, the outlook for 2025 looks very positive. However, 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.

Tea Exporters Association Chairman 
Huzefa Akbarally

We expect to enhance the revenue from tea exports to US $ 1.5 billion in 2025. The tea export revenue has already reached US $ 1.3 billion by November 2024 and will certainly achieve US $ 1.4 billion by end-2024. It is important to note that the revenue growth has been achieved despite the decline in tea crop.
We also expect Sri Lanka’s tea production to reach 275 million kilogrammes in 2025. Sri Lanka has produced 240 million kilogrammes of tea by November 2024 and the year-end figure would be around 260 million kilogrammes. The country produced 307 million kilogrammes of tea in 2021 but it dropped to 251 million kilogrammes in 2022, due to the fertiliser issue. The industry now targets reaching 300 million kilogrammes in the next three years. We expect the government to extend the necessary assistance to over 450,000 tea smallholder farmers and plantation companies to increase tea production to over 300 million kilogrammes in the coming years.
The tea exporters also expect to increase the export volumes to around 260 million kilogrammes in 2025. The tea exports during the first 11 months of 2024 reached 223 million kilogrammes and may achieve 240 million kilogrammes by end-2024.
On the domestic front, the proper application of fertiliser is important to achieve growth in tea production. Many tea smallholder farmers complain of delays in receiving the subsidised fertiliser. As exporters, we are keen to see growth in tea production.
The escalation of military conflict in the Middle East is a concerning factor, as it could affect our tea exports. About 50 percent of our annual tea exports reach the Middle Eastern countries.
It is important to see an early end to the Russia-Ukraine war, as Russia and the CIS countries absorb 20 percent of the annual tea exports from Sri Lanka.
The impact of climate change is a significant challenge for all tea-producing countries. Extreme heat or excessive rain could negatively impact the tea crop.
According to international research agencies, the value of the global tea market is expected to grow at a CAGR of over 5 percent next year. The US FDA declaring tea as a health beverage will certainly boost tea sales in North America and the Western countries.
The estimated oversupply of tea in the world market by end-2024, mainly from Kenya, is estimated to be around 300 million kilogrammes and this volume may carry forward to 2025. However, the World Bank predicts that the tea prices will remain stable in 2025, due to the slow recovery in supplies in India and Sri Lanka and also subdued demand growth from the Middle East.

Commercial Bank Managing Director/CEO Sanath Manatunge

With the stabilisation of macroeconomic variables, Sri Lanka is expected to record a healthy economic growth in 2025. Fiscal consolidation, enhancing government revenue, promoting transparency in governance and strengthening investor confidence should be priorities to boost economic revival.
With a low-interest-rate environment squeezing profit margins, intensifying competition can be expected. However, the banks can capitalise on economic growth through increased lending and trade finance opportunities. Managing credit risk will assume greater importance. The suspension, till March 2025, of the parate execution law and proposed SME relief measures are likely to create complexities that would have to be carefully navigated. The banks will also need to adeptly manage foreign exchange risk amidst global uncertainty.
Digital transformation and cybersecurity will be other priorities, with rapidly changing customer expectations demanding sophisticated and secure technology-driven solutions.
With the Central Bank and World Bank projecting 3 percent and 3.5 percent growth respectively, Sri Lanka’s economic outlook for 2025 appears promising. Inflation is expected to remain low until mid-2025 and to gradually increase towards the Central Bank’s target range. This, together with low market rates, should stimulate economic recovery by encouraging lending.
The easing of vehicle import restrictions, resumption of debt repayments and rising imports could exert downward pressure on the Sri Lanka rupee. This may be mitigated by improved foreign currency inflows from exports, tourism, remittances and multilateral funding. Furthermore, upgrades of Sri Lanka’s sovereign credit rating should improve investor confidence and foreign investment flows.

Women’s Chamber of Industry and Commerce Chairperson Gayani de Alwis

The start of a new year always provides an opportunity to reflect on the past and set expectations for the future. Our expectations are often easy to state: we want a better society to live in, a higher quality of life and a more inclusive and just society overall. I strongly believe that 2025 will be the year of transformative change, given the shifts taking place following our economy’s declared bankruptcy. The Women’s Chamber of Industry and Commerce expects proactive solutions that will support 51 percent of the nation’s population, as it is almost imperative that these changes address our primary challenges such as access to capital and markets.
Let us hope that together we can shape a transformative future that fosters inclusivity and enhances the quality of life for all. While it is easy to state expectations, the key to realising them lies in how we all act and work together. I see a significant number of challenges that demand innovative approaches, if we are to succeed. Geopolitics is a major stressor. Economic pathways need to be created, as the old ways will no longer work, which requires bold decision-making. We are living in an age of chaos, where supply chain disruptions have become the new normal and nearshoring and inshoring have become solutions to some of these issues. Climate change is pushing us to seek shorter supply chains within a more circular economy. Population inequalities are increasing, which are internal challenges that require both empathy and action. The list goes on.
I believe our leadership will be tested and the decisions made will matter in the end. Our innate resilience gives me hope, as we have shown time and time again that we can bounce back, stay united and turn crisis situations around. Simply asking the government and waiting will not suffice; we too must commit. In 2025, we will see a shift in the economy, with the rupee strengthening, if we play our cards well. Society will feel a reduced burden from corruption. We have experienced the depths to which a country can fall and the lessons learned should not be forgotten. As a nation with demonstrated resilience, I remain optimistic about 2025.

Sri Lanka Gem and Jewellery Association President Akram Cassim

2025 will be a transformative year for Sri Lanka’s gem and jewellery industry. Known for its 2,500-year history and world-class sapphires, the industry has a vast potential to boost foreign exchange earnings and create jobs. However, the fiscal and structural challenges are critical barriers to growth.
Facets Sri Lanka 2025, the premier gem and jewellery exhibition, will be held from January 4 to 6, at Cinnamon Grand Colombo. It will serve as a vital platform to showcase Sri Lanka’s gemstone collection and innovations in jewellery and lapidary, attracting global buyers and cementing the country’s reputation as a gem hub. The industry is looking forward to this event.
I must stress the critical need for policy reforms to streamline the regulatory processes, reduce operational challenges and improve the overall ease of doing business. Among the most pressing concerns are fiscal barriers such as high taxation and rigid import-export regulations, which hinder growth. Many businesses have already lost their competitive edge and are relocating operations overseas, due to these challenges.
In addition to the fiscal measures, the stakeholders advocate for integrating the industry with tourism, proposing initiatives like ‘Sapphire Experience’ in collaboration with Sri Lanka Tourism and SriLankan Airlines. This immersive programme will offer visitors a first-hand experience of Sri Lanka’s gem heritage, blending tourism with industry promotion.
By focusing on innovation, sustainability and much-needed reforms, we envision 2025 as a pivotal year to ensure resilience and growth for Sri Lanka’s gem and jewellery sector.

Verite Research Executive Director Dr. Nishan de Mel

As Sri Lanka enters 2025, it is perhaps the most optimistic the country has been about a positive change in governance and political culture, at least since the election in 2015. In the next five years, Sri Lanka’s real GDP, which is presently around what it was in 2016, will comfortably exceed the baseline projections of the IMF debt sustainability analysis.
Yet, a critical task for sustained economic recovery is to address the corruption in decision-making, which has been more destructive than the corruption of commission-taking.
It’s salutary to keep in mind the two things that drove Sri Lanka into its present crisis. (1) Letting unsupported opinions rather than strong analysis navigate policymaking; (2) Keeping corrupt interests in the driving seat of decision-making. These two things are dangerously self-reinforcing. 
Sri Lanka’s optimistic prospects, then, will depend on how much decision-making can be steered differently in 2025 – including steering away from the IMF programme commitments that are not supported by published analysis.
What will increase our optimism? It will start with the budget. If it boils down to one thing, it will be seeing policies that are supported by published analysis. This will be an indicator of whether or not it’s business as usual.
This change in the manner of decision-making is also time critical. Having executed one of the slowest and shallowest debt restructurings in the last decade, Sri Lanka does not have space for too many more mistakes or delays in steering a better economic path. As the old English idiom goes: a stitch in time saves nine.

Colombo Stock Exchange Chairman 
Dilshan Wirasekara

The Colombo Stock Exchange (CSE) has set ambitious expectations for 2025, focusing on attracting foreign investments, broad basing the domestic investor base, enhancing market infrastructure and product diversification.
The CSE plans to align the exchange more closely with the broader economy, encouraging Sri Lankans to hold diversified equity portfolios and to offer greater ease of accessibility to the CSE’s diversified products and services through a digital transformation strategy.
The CSE also aims to integrate environmental, social and governance (ESG) principles and implement reforms to facilitate broader market participation and sustainable growth.
However, the industry faces several challenges: limited understanding of equities by the broader section of the investing community, lack of large liquid companies, a relatively small base of domestic investors and lack of instruments for investors to hedge risk.
Improving financial literacy, implementation of a strategy to attract new companies to list, expanding the base of investment advisors and branch offices, leveraging on digital aids to enable a single sign in mobile app for customer on boarding and trading and settlement and establishment of derivatives instruments are some of the planned initiatives to address these challenges.   
The outlook for 2025 is positive. Continuation of the IMF reform programme, a low interest rate environment, stable currency, debt restructuring, single-digit inflation, positive economic indicators, country rating upgrade and a stable political environment are positive developments to drive growth. 
Despite the rerating of market valuation in recent times, the stock market remains an attractive option with a low price-to-earnings ratio of 9x, relatively cheaper than its regional peers in Asia.
Increased IPO activity and growing investor confidence signal a promising year ahead for the Sri Lankan capital market.

John Keells Holdings Chairperson Krishan Balendra

I am optimistic about the prospects for our private sector and the overall economy as we move into 2025. The stabilisation of the currency, drop in inflation and increase in foreign reserves throughout 2024 have produced a favourable business and investment climate that will allow our group to continue promoting transformative change and sustainable development in the upcoming year as Sri Lanka enters a new phase in its political and economic history.
Nonetheless, challenges persist in the economic landscape that require vigilant navigation and good governance. For businesses, this means prioritising investment in technology, continuous adaptability and mastering sustainable practices in order to address these complexities. Despite the challenges, the overall outlook for 2025 is promising. 
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, ports and logistics. 
At John Keells Group, we are committed to playing a pivotal role in driving this progress, leveraging our legacy of excellence and innovation to deliver value to all our stakeholders.

Free Trade Zone Manufacturers’ Association Chairman Dhammika Fernando

We, as the only fully export-oriented trade chamber predominantly representing FDI, emphasise the importance of achieving the country’s export growth target of US $ 18.7 billion by end-2025. In order to accomplish this important task, we envisage that the new people’s government will take the following actions, as this is another rare opportunity for Sri Lanka to achieve an accelerated growth trajectory and realise the much-anticipated expansion of the economy, by at least 3.5 percentage points. It is only then that the country will be able to witness glimpses of an economic renaissance.
The likely challenges the industry will face include: Rise in cost of production – This is attributed to the cost of power, as we see that the CEB is unwilling to revise electricity costs during 2025, despite the proposals for revision made by the PUCSL. Reduction of ROE – The rise in the rupee’s value against the dollar, combined with the higher cost of production, could negatively impact the export-oriented companies, making the country’s exports less competitive in the global markets and potentially leading to a contraction.
Furthermore, the continuation of corporate income tax at 30 percent of net profit will undermine productivity across all sizes of businesses, with a particularly negative effect on SMEs, due to their lower technological intensity and productivity.
In terms of outlook, since over 40 percent of our exports go to the European Union, including the UK, the looming recession in Germany and France is likely to impact our exports. Growth in these markets is expected to become fragile, resulting in a reduction in exports.
Under the new government policies of Donald Trump, elected for a second term, he is once again proposing significant tariff increases as trade policy measures. These potential changes in US tariff policies will directly impact Sri Lanka’s export industries.
Lastly, there is overwhelming public trust in the new government, as people hope, against hope, that this will be Sri Lanka’s last chance to achieve both political and economic stability. Many are pinning their aspirations on this, so the NPP government must take this responsibility very seriously.

Aitken Spence Deputy Chairman and Managing Director Dr. Parakrama Dissanayake

As we look ahead to 2025, we remain optimistic about the opportunities and growth potential in Sri Lanka. Our diversified portfolio at Aitken Spence PLC positions us well to navigate the evolving economic landscape and capitalise on the emerging trends.
However, we are mindful of the challenges that lie ahead of both in Sri Lanka and global. In the Sri Lankan context, we anticipate challenges related to inflationary pressures, trade deficit, volatility in the Sri Lankan rupee, supply chain disruptions and need for continued digital transformation. The global economic environment remainws uncertain, with potential impacts from geopolitical tensions, fluctuating commodity prices and evolving regulatory frameworks.
These challenges are not new to us and we are continuously adapting and we are commitment to innovation, sustainability and taking our expertise to new international markets. We will continue to invest in our people, strategic partnerships and technology, to enhance our competitive edge and deliver value to our stakeholders.
In 2025, we aim to strengthen our market position, explore new growth avenues and contribute positively to Sri Lanka’s economic development. Together, we will continue to build a stronger, more sustainable future for our stakeholders while touching the lives of the communities we serve.

People’s Bank CEO Clive Fonseka

As we usher in 2025, we, at People’s Bank, remain steadfast in our commitment to driving economic progress while enhancing value for our stakeholders. Our ambitious yet achievable vision for this year consists of mainly three components. 
Firstly, empowering small and medium enterprises (SMEs) will remain at the core of our agenda. By extending tailored financial solutions to SME businesses, we aim to unlock their potential, fostering innovation and entrepreneurship across the nation. 
Secondly, we will leverage cutting-edge technology to redefine customer experiences, ensuring seamless and efficient banking services for all. 
Thirdly, we aim to elevate our profitability to unprecedented levels through multiple strategic initiatives and unwavering dedication.
We recognise that the global economic uncertainties such as market corrections, geopolitical volatility and fluctuating commodity prices, may pose challenges to the financial sector. However, we are confident that the anticipated stability in the country’s interest and exchange rates, coupled with increasing entrepreneurial activity and a resurgence in consumer spending, will create a conducive environment for growth.

Ceylon Association of Shipping Agents Chairman Shano Sabar

We hope for an end to the war and a restoration of the Red Sea to its full potential with President Trump coming into power, as he is known to be anti-war. 
In the local front, we expect the government of Sri Lanka to fast-track all port development, speed up equipping terminals with all operational infrastructure, to perform comparably with the regional terminals and hubs.
We acknowledge the need to initiate steps to eradicate corruption in the industry and empower the cleansing of the system with the involvement of the Maritime Anti-Corruption Network. There is a need to fast-track the Port Community System, Maritime Single Window and National Single Window, to digitalise the trade and port/terminal sector, to avoid the use of hardcopies and multiple visits to the stakeholders.
While efforts are required to enhance services and facilities for passenger cruise liners and conventional break bulk vessels, we must look towards boosting private maritime security operations, with a view to enhance the volume through Galle and provide opportunities for Sri Lankan maritime security personnel too.
Further, efforts are needed to introduce a comprehensive maritime policy – the industry stakeholders worked on such a document within depth and widespread focus – which has been sent to the Ports, Shipping and Aviation Ministry.
While we hope to see a speedy process for the customs-detained containers, with enquiries fast-tracked and empties released to line with no protracted delay, due to customs enquiries and litigation, it is necessary to move domestic import containers out of the Port of Colombo to ease congestion and enhance the efficient clearance process.
The challenges are intrinsically linked to overcoming the issues above and speedily so considering that much time has been lost in meeting most of the challenges above with several initiatives either postponed or cancelled or delayed by the successive governments.
We note that the government faced with a steep learning curve and particularly lacking the specialised industry experience and expertise in the Sri Lanka Ports Authority/Ports Shipping and Aviation Ministry, due to retirement and short supply of such personnel in the sector.
The outlook is optimistic as we are confident of Sri Lanka’s ability to meet the challenges ahead, given the Clean Sri Lanka drive of the new government.

CMTA President Virann de Zoysa

After five years of restriction, it is expected that the automotive imports will once again resume in the year 2025. The CMTA is confident that key learning during the import ban will translate into sustainable policy. The CMTA is hopeful that the policymakers will continue to engage credible stakeholders on the way forward with the automotive industry.
The resulting exchange rate combined with the introduction of indirect taxation (VAT) has impacted the overall pricing, with increases of over 100 percent compared to 2020. The reality of price points will be a challenge to consumers and industry growth.
As a nation, significant progress and recovery have been achieved. 2025 and beyond must focus on sustainable policy with longer-term vision.

Joint Apparel Association Forum Secretary General Yohan Lawrence

Sri Lanka apparel will end 2024 with exports in the region of US $ 4.6 billion. Whilst this is a marginal improvement on last year’s exports of US $ 4.5 billion, we are still some way off the pre-covid US $ 5 billion level. Global demand for apparel remains weak and excess supply over demand continues to force pricing down. 
Industry growth will hinge on navigating economic recovery, supply chain resilience and having better market access to grow in both existing and new markets. 
Immediate challenges the industry faces are pricing pressure and currency appreciation. Volume growth is currently outpacing revenue growth, indicating a challenged price environment. Reduced pricing in turn leads to reduced profitability. 
The Sri Lankan rupee has appreciated considerably over the last two years, increasing wage costs in US dollar terms by some 35 percent. This comes at a time where the currencies of our competitor countries are strengthening, enhancing their profitability at the expense of the Sri Lankan exporter. It would only be once the market imperfections of the restrictions of vehicle imports and capital market transactions are lifted that we will see the Sri Lankan rupee return to  some sense of a correct market value, that too in the absence of debt repayment. 
The outlook for 2025 remains cautiously optimistic. Creating an environment that will attract new investment into the sector will be necessary if we are to achieve the ambitious goals set out by the government. Access to new markets remains a key factor that needs to be overcome to help grow our export base. 

The Hotels Association of Sri Lanka President M. Shanthikumar

The most important is for the government to action initiatives, which will sustain the tourism growth figures for the next five years. We, at The Hotels Association of Sri Lanka, strongly believe that an immediate launch of a global promotional campaign is the need of the hour. All stakeholders in our country must not overlook the fact that competing destinations are actively carrying out promotions in their respective source markets. 
The industry has been facing a few challenges over the past years. We feel confident that the present regime will address these issues in the near future, as they require to be addressed if the industry is to sustain itself in the future.
Hotels are a key component of tourism into the country. There is a need for hotels to carry out a refurbishment/renovation programme to keep up with the global standards and client expectations.
Hence, we hope the government will provide financial support and assist the hoteliers to carry out their upgradation, as it completely stopped since 2019 Easter Sunday attack.
Looking at the present trend in tourism, commencing from the end of summer and beginning of this winter season, we are nothing but positive of tourism growth into Sri Lanka in 2025. The year 2024 will end achieving the target of two million + tourists. If the present external climate prevails next year, we will see good results and the hotel occupancy will continue to be high.

KPMG Principal Tax and Regulatory Suresh R.I. Perera

In 2025, I expect there will be more equitable tax policymaking via a newly established tax policy unit in the Finance Ministry as opposed to the current trial and error policymaking approach whilst achieving the required tax-to-GDP ratio as per the IMF targets. White papers on tax policies should be published to gather feedback. 
The establishment of a statutory tax ombudsman, the need of the hour, should be fulfilled. Expanding the scope of the withholding mechanism, prioritising the digitalisation of the tax compliance process are measures to be expected.  
Winning the trust of the relevant foreign investors as a stable investment destination with political stability, apt infrastructure and efficient workforce and tax certainty is a challenge. 
The global economic slowdown, competition from other countries, cost of production, availability of skilled workforce, interest rates, not having access to advanced technology are the challenges faced by the industries. 
A short-term challenge will be managing the immediate foreign currency outflow, due to the restrictions being lifted on motor vehicle imports.
A long-term challenge will be boosting economic activity, increasing state revenue and building reserves to strengthen the economy and manage debt repayments from 2028 onward.
The outlook for Sri Lanka in 2025 is positive but there are many challenges facing the country. High unemployment and poverty would be challenges to the government. I expect a strong increase in the tax revenue for the government in the coming year, both from individuals and corporates. Technology will continue to advance at a rapid rate globally and we should keep our fingers crossed to see if Sri Lanka can keep up with the rest of the fast-moving world. If the right moves are executed, then Sri Lanka has the opportunity of immediately reap the benefits from the enhanced tourism. 

National Chamber of Exporters President Jayantha Karunaratne

We, as exporters, are optimistic about 2025, anticipating a year of growth underpinned by favourable work conditions and a supportive policy environment. Expectations centre around a stable currency to ensure competitive pricing in global markets and a reduction in costs, including lower interest rates, to ease financial pressures. Additionally, the exporters look forward to a promising national budget that prioritises their needs, incentivising value addition and innovation while fostering global market expansion. These measures are viewed as critical for enhancing Sri Lanka’s export competitiveness and economic resilience.
Despite the optimism, Sri Lanka’s export industry is likely to face several challenges in 2025. The government efforts to boost revenue through higher taxes could increase costs for exporters, squeezing margins and competitiveness. The existing complex and time-consuming approval processes may continue to hinder efficiency and delay operations. Additionally, the evolving overseas market dynamics, including stricter regulatory and sustainability requirements, could demand significant adjustments. Fluctuations in foreign exchange rates also remain a concern, potentially impacting profitability and pricing strategies in global markets. These challenges highlight the need for strategic reforms and adaptability within the sector.
The outlook for Sri Lanka’s export industry in 2025 appears cautiously similar to 2024, as no significant systemic changes are expected. While certain sectors, such as tourism, are poised for growth with increased travel to Sri Lanka, driving expansion in the hotel industry and related service sectors, the merchandise export sector may not see the anticipated rise. A lack of targeted incentives for merchandise exporters could dampen growth prospects, leaving this segment trailing behind the more dynamic service-oriented sectors. This mixed outlook underscores the need for a balanced policy approach to ensure comprehensive economic development.

Ceylon Chamber of Commerce Chairman Duminda Hulangamuwa

In recent years, the focus has been on establishing the macroeconomic foundations and stability necessary for growth. In 2025, it is crucial to build on this hard-earned progress to place growth on a sustainable trajectory. Priority must be given to reforms aimed at enhancing agricultural productivity, digitalisation efforts such as the Digital ID, advancing energy sector reforms, streamlining customs processes and fostering an export-friendly environment. These measures will empower the private sector to serve as the driving force behind sustainable economic growth. From the public sector, we expect to see steps taken to improve efficiency in delivering service to the public. Some of the SOEs must take the responsibility of reforming itself to be profit-making while maximising public service. 
Global developments are expected to significantly influence the external sector of the economy, particularly in relation to our key export partners. In the agricultural sector as well as in power generation, shifting climate patterns will play a crucial role in shaping outcomes.
If we maintain the current reform momentum, have minimal impact from external developments and benefit from favourable weather conditions, achieving GDP growth of over 5 percent this year is within reach. Inflation is expected to return to single-digit levels by the second half of the year as consumer demand strengthens. Tourism is likely to continue its upward trajectory, potentially matching or even surpassing the peak levels of 2018. Additionally, service exports, particularly in sectors such as maritime, are projected to see sustained growth in 2025.

SLASSCOM Chairman Nishan Mendis 

In 2025, we expect Sri Lanka’s knowledge and innovation industry to solidify its position as a global innovation hub, with increased export revenue, a highly skilled workforce and a thriving start-up ecosystem driving economic growth. Achieving these goals will require a strong focus on industry-ready talent creation, enhanced ease of doing business and consistent policy frameworks. We also anticipate significant advancements in digital transformation, enhancing Sri Lanka’s citizen service delivery and driving the overall upliftment of government services, innovation and development.
The industry may face challenges, including bridging the mid-tier talent gap caused by brain drain, rising costs of doing business, global economic uncertainties and increasing competition from other markets. Furthermore, creating an environment that attracts new investments into Sri Lanka’s knowledge and innovation sector will be essential.
The outlook is optimistic. Sri Lanka’s knowledge and innovation sector, already powering some of the world’s top brands, is well-poised for growth, leveraging its ingenuity and resilience. We expect this to be further supported by the strong government committed to advancing the industry.
SLASSCOM is focused on five key impact areas to drive the growth of Sri Lanka’s knowledge and innovation sector: developing a highly skilled workforce through talent development and skills enhancement, expanding Sri Lanka’s global market presence and inward investments, encouraging entrepreneurship and innovation through start-up support, promoting sustainability and inclusion by emphasising ESG principles and fostering a diverse workforce and advocating for supportive policies that foster innovation and ease of doing business.

Ceylon Federation of MSME President Mahendra Perera

As we approach 2025, the Ceylon Federation of MSMEs is hopeful about the positive impact of the government’s upcoming incentive package for the micro, small and medium-sized enterprise (MSME) sector. The specifics of the package, expected to be unveiled shortly, promise to offer significant relief to the MSMEs through the restructuring of the existing loans at interest rates below 10 percent as well as the provision of new loans under similar favourable terms. Additionally, the potential waiver of accrued interest on the loans from the past five years is an encouraging move that could ease the financial burdens and enable many businesses to recover.
Despite these promising developments, some challenges may affect the implementation of these measures. The timely and efficient execution of the package will be crucial and any delays in coordination between the government bodies, banks and MSMEs could slow down the relief process. Furthermore, broader economic factors such as inflation and reduced consumer demand, may still pose significant obstacles to the full recovery of the sector.
That said, the outlook for the MSMEs in 2025 remains cautiously optimistic. If the proposed incentive package is successfully implemented, it could play a pivotal role in revitalising the sector. We believe that through continued collaboration between the government, financial institutions and MSME community, we can overcome these challenges and ensure a sustainable and thriving future for the MSMEs in Sri Lanka.
In order to facilitate the above practices as well as address the other issues encountered by the MSME sector, we suggested the new government implement a national policy for the MSMEs, with all necessary measures inbuilt, in 2025.
As the government aims to have a manufacturing economy in Sri Lanka, we hope that the government should facilitate affordable electricity, skilled labour, duty free raw materials and machinery. Creating such an environment would help the government to have a manufacturing economy. 

Planters’ Association of Ceylon Chairman Sunil Poholiyadde

The plantation sector is prepared for a positive trajectory in 2025, with wage negotiations settled at a 35 percent increase, reaching Rs.1,350, along with a productivity incentive for the next three years, ensuring stability for producers and workers alike, while empowering workers to substantially increase their earnings. Enhanced access to fertiliser and agrochemicals, facilitated by streamlined supply chains and government support, is expected to boost productivity across the sector’s plantation crops—tea, rubber, coconut and the removal of the ban on oil palm cultivation. This productivity boost is anticipated to drive increased production volumes in all four plantation crops, contributing more significantly to the national revenue.
The plantation sector faces a volatile global landscape for tea, rubber, oil palm and coconut, posing significant challenges to its growth and competitiveness. Rising production costs and global uncertainties in key export markets for primary crops further add to the industry’s concerns. The long-awaited extension of the current leases of the Regional Plantation Companies will encourage long-term investments, foster modernisation and drive growth. The adoption of clear and supportive land-use policies for cultivation of oil palm and harvesting of fuelwood above 5000 feet mean sea level is essential to encourage stability and sustainable investment. Improved crop yields, stable prices and the anticipated reinstatement of SVAT will strengthen industry performance. Addressing these challenges will be crucial to safeguarding the industry’s resilience and ensuring its continued contribution to the economy. 
The outlook for 2025 is positive, with expectations to surpass 2024’s production and export earnings. Embracing technology and innovation will enhance competitiveness, with mechanisation of field and factory operations addressing the declining labour force. Additionally, the industry’s diversification into other high value export crops, tourism and renewable energy, particularly solar power, hold the key to long-term sustainability. These advancements, coupled with supportive policies and global demand, position the plantation sector for a promising year ahead.