News & market updates

National Consumer Price Index inflation rose to 2.4% in March 2026 from 1.6% in February; food inflation eased to 0.7% while non-food year-on-year inflation rose to 3.8% from 1.9%.

EPF fully exited holdings in six CSE-listed companies in 2025 — Cargills Bank, Ceylon Hotels, Colombo Dockyard, Jetwing Symphony, LAUGFS Gas and Sierra Cables — and made one new investment, buying 40 million shares in Hemas Holdings; its listed equity count fell from 65 to 59.

Industry leaders at a Sri Lanka-Italy Business Council forum warned geopolitical tensions are testing Sri Lanka’s 2026 recovery, citing a 17.4% drop in tourism to 22 March, ~35% of shipping routes affected and sharp rises in freight, insurance and energy costs that could hit exports and tourism if prolonged.

Asian markets rallied on April 20, 2026, as an AI-led upturn and improving hopes for peace in the Middle East lifted key indices, erasing conflict-related losses and pushing several benchmarks toward record highs. Investors remain lightly positioned with subdued trading volumes amid rapidly changing headlines.

World Bank says Sri Lanka's planned phase-out of para-tariffs (PAL and CESS) by 2029 will cut average import duties by about nine percentage points, with manufacturing hit hardest—food & beverages could see cuts up to 28 ppts while textiles and mining under 5 ppts. Household consumption is projected to rise ~3.1%, with larger gains for lower-income rural households.

Gavinro International launched GV Auto, an EV distribution arm representing Skywell, Skyworth and Keyton, and has secured supply agreements with corporate clients including Aramex Sri Lanka and Navesta Pharmaceuticals to provide electric vehicle transport solutions.

LIIN and WUSC hosted the first GRIT-EDTP investor pitch competition in Jaffna to support women entrepreneurs after training 340 participants; winner Pallueir Ltd received Rs. 600,000 in seed capital.

World Bank projects Sri Lanka's growth will moderate to 3.6% in 2026, citing higher energy prices and a transition to more sustainable growth. It flagged risks from persistently high energy costs, flight disruptions hitting tourism, skilled-labour shortages, weak public capex execution and climate shocks.

CBSL's PMI showed Manufacturing PMI rose to 66.7 in March (from 56.8 in February) and Services PMI rose to 59.4 (from 54.4). Expansion was led by seasonal demand, financial services and retail, though firms reported raw-material and fuel shortages, shipping delays and Middle East conflict risks.

Colombo Stock Exchange closed down with the ASPI down 0.89% to 22,570.03 and the S&P SL20 down 0.66% to 6,222.79. Asiri Hospital (+12.37%), Melstacorp and Carson Cumberbatch led gains while RIL (-5.92%), C T Holdings and Dialog were top decliners; turnover Rs 4.11bn.

British Cosmetics (Private) Limited has entered a strategic partnership with Ethera Business LLC to advise and support its disciplined expansion into international markets; the first market-specific distribution partner will be announced in due course.

Dhammika Fernando was re-elected chairman of the Free Trade Zone Manufacturers Association for 2026/2027 and urged policy reforms, faster approvals and improved ease of doing business to support exporters and sustain investment and employment.

Sri Lanka–Benelux Business Council hosted a seminar on quality assurance, safety standards and certification, focusing on Halal certification and the global demand for Halal-certified products to guide exporters and food & beverage manufacturers on ISO and Halal compliance.

PMI Manufacturing rose to 66.7 and PMI Services to 59.4 in March 2026, indicating expansions driven by seasonal demand and strong financial services activity. Firms reported tight production from raw-material and fuel shortages, longer supplier delivery times and precautionary stocking amid the Middle East conflict.

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.

Inextricable Group appointed Jayantha Peiris as Senior Vice President, Digital and Enterprise Transformation. Peiris, with 30 years at MAS Holdings leading ERP and digital initiatives, will strengthen the consultancy's apparel and manufacturing ERP, data and Industry 4.0 service offerings.

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.

Fitch says a steep rise in global energy prices has started to show up in March inflation data and has lifted government bond yields as markets price potential fiscal and monetary responses.

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.

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 UK’s revised Developing Countries Trading Scheme (DCTS), effective January 2026, gives Sri Lanka’s apparel sector greater competitiveness by easing rules of origin and allowing more flexible sourcing, benefiting SMEs with better pricing, shorter lead times and improved market access.

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.

Three Sinha Industries Ltd was awarded the SLIA Product Award of Merit on 27 February 2026 for its locally manufactured Clean Room Door, recognised for durability, hygiene control and suitability for healthcare, laboratory and industrial clean rooms.

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.

Colombo Stock Exchange closed up: ASPI +1.30% (284.12 pts) to 22,128.66. Top contributors included John Keells, Melstacorp and National Development Bank; turnover was Rs5.016bn and HNB Finance announced a Rs2,499,529,714 rights issue (2 for 9).

LANKATILES unveiled an immersive Concept Studio at Architect 2026, winning Overall Best Stall and Best Trade Stall Displaying Local Products. The showcase presented new ranges (including Majestica and mosaics), zoned interior settings and an AI-powered Tile Visualizer for architects and homeowners.

Chevron Lubricants Lanka PLC launched the Caltex Abimani Women in STEM scholarship program with the Ceylon German Technical Training Institute to support young Sri Lankan women pursuing STEM education. The initiative provides scholarships, resources and technical training support to advance careers in engineering and technology.