News & market updates

The Management Club will host the Northern Investment Summit 2026 on 21–22 January 2026 in Jaffna to showcase KPMG-vetted, district-specific bankable proposals aimed at unlocking investment in the Northern Province; Hatton National Bank (HNB) is the official banking partner.

Colombo Stock Exchange opened mixed: ASPI rose 0.29% to 22,132.33 while the S&P SL20 slipped 0.06% to 6,037.79 on turnover of about Rs. 3.7bn and net foreign outflows of Rs. 200.5m. Colombo Dockyard, DFCC and Richard Pieris led gains while John Keells and Commercial Bank fell.

Vikyno became the market-leading 2-wheel tractor in Sri Lanka in November 2025 with 99 units registered (up from 53 in October and 33 in September). The Vikyno is advertised online by Brown and Company and Singer Sri Lanka.

Cabinet approved the Sustainable Agriculture Program to start in 2026 with Rs.800 million from a revolving Sustainable Agricultural Fund to provide concessional agriculture loans at 2% p.a.; individual loans up to Rs.5m and bulk loans up to Rs.500,000 will be disbursed via agricultural and Samurdhi banks.

The Jaffna International Trade Fair will return 23–25 January 2026 at Muttraweli Ground, featuring 400+ stalls; last year the event attracted 78,452 visitors and 5,000 invited business delegates.

FAO reports Cyclone Ditwah damaged about 106,000 hectares of paddy—roughly 20% of 2026 Maha sowings—and affected over 2.2 million people. The cyclone also caused fisheries losses estimated at LKR 20.5–21.5 billion and heavy livestock and vegetable crop damage across multiple districts.

Central Bank says the Western Province accounted for 42.4% of Sri Lanka's nominal GDP in 2024 (nominal GDP 29,899 billion rupees) while the combined share of the other provinces increased, with North Western and Central provinces the next largest contributors.

India pledged a $450m reconstruction package for Sri Lanka—$350m in concessional lines of credit and $100m in grants—to support recovery from Cyclone Ditwah. Assistance will target roads, bridges, housing, health and education, agriculture and disaster-response, with India also encouraging tourism and FDI.

Sri Lanka has yet to fully assess Cyclone Ditwah's economic fallout; the World Bank's rapid estimate puts direct physical damage at $4.1bn (about 4% of GDP), while the government says a comprehensive damage-and-needs assessment will take at least four weeks and likely show higher total costs.

ILO estimates Cyclone Ditwah affected up to 374,000 workers in Sri Lanka, with potential monthly income losses of US$48 million. Agriculture and fisheries were severely hit — up to 23% of rice area flooded and preliminary tea output losses could reach 35%, hitting smallholder tea farmers hardest.

Villagers from Bandarawela continued hauling truckloads of two-year-grown cypress Christmas trees to Colombo after roads were cleared despite Cyclone Ditwah; farmers depend on these seasonal sales as their primary market.

India committed US$450 million to Sri Lanka for Cyclone Ditwah recovery, comprising US$350m in concessional lines of credit and US$100m in grants to rebuild roads, railways, bridges, houses, health services and rehabilitate agriculture.

IMF warns Cyclone Ditwah could destroy 2.5–5% of GDP, widen the balance-of-payments gap by about $700m and push average inflation to 5.4% in 2026, above the CBSL 5% limit. Agriculture and tourism are hardest hit while reconstruction may support construction but raises external and debt risks.

The Western Province accounted for 42.4% of Sri Lanka's nominal GDP in 2024, down from 44.0% in 2023 as other provinces lifted their combined share; national nominal GDP rose to Rs. 29.9 trillion. The Western Province generated Rs. 12.66 trillion, while North Western and Central provinces recorded Rs. 3.45 trillion and Rs. 3.20 trillion respectively.

EDB Chairman says Sri Lanka is on track to surpass $17.0bn in export revenue in 2025 after goods and services earned $15.77bn in Jan–Nov, up 5.8% YoY. Apparel reached $4.82bn (4.9% YoY), tea exceeded $1.4bn (7.4% YoY) and services were $3.35bn (3.6% YoY).

Sri Lanka will launch the National Export Development Plan (NEDP) in January 2026, targeting about $36 billion in export receipts over 2026–2030. The plan, prepared with the ADB, includes tariff reform (Rs.80bn), Rs.2.5bn for a National Single Window, aims to create 3,000 new exporters and a Ministerial report on FTAs by Feb 2026.

A Sri Lankan trade delegation visited Phnom Penh to explore investment and trade opportunities and agreed with Cambodia’s Investment Board to organise a virtual investment roadshow. Discussions highlighted opportunities in premium rice, cashews, agrifood processing, microfinance, logistics, digital innovation and Cambodia’s tax incentives (3–9 year tax holidays, VAT exemptions, up to 150% R&D deductions).

The National Initiative for the Commercialisation of Research and Development (NIRDC) awarded over LKR 227 million to nine projects selected in Q1, with Bank of Ceylon providing funds under MoUs and disbursements tied to project KPIs. Projects span AI, energy supercapacitors, tea and cinnamon processing, coconut oil testing, kitul beverages, export knitting and soil microbial inputs.

World Bank estimates Cyclone Ditwah caused US$4.1 billion in direct physical damage in Sri Lanka, about 4% of GDP. Infrastructure losses were US$1.735bn (42% of damages), residential US$985m, and agriculture US$814m, with Kandy hardest hit (US$689m).

World Bank's GRADE estimates Cyclone Ditwah caused US$4.1 billion in direct physical damage in Sri Lanka (about 4% of GDP). Infrastructure accounted for US$1.735bn, agriculture US$814m and residential US$985m; the World Bank has mobilized up to US$120m for recovery.

Sri Lanka's NCPI inflation fell to 2.4% in November 2025 from 2.7% in October 2025. Food inflation eased to 3.6% (from 4.1%), non-food inflation remained at 1.5%, and the NCPI index was 207.2, down 0.3 points month-on-month.

At least 573 exporters in areas hit by Cyclone Ditwah are facing shortages of raw materials for agricultural products and spices, the Export Development Board said; damage assessment is ongoing and the government will coordinate post-disaster responses.

Sri Lanka's exports for Jan–Nov 2025 reached US$15,776.36 Mn, up 5.8% y/y, with November 2025 exports at US$1,364.52 Mn (+5.56% y/y). Merchandise exports rose 6.41% to US$12,417.98 Mn and services 3.62% to US$3,358.35 Mn; coconut products, processed foods and selected electronics showed strong gains while apparel and tea recorded modest increases.

ADB approved a $3 million grant to pilot four modern pipe distribution network (PDN) systems to irrigate 877 hectares and support 943 farming households in Sri Lanka’s Northwestern and Uva provinces.

The Planters’ Association said RPCs moved swiftly after Cyclone Ditwah to safeguard estate workers and restore basic services, with most estates now reachable and comprehensive damage assessments still underway. Estate medical teams are monitoring post-disaster health risks while RPCs strengthen preparedness for the coming rainy season.

Sri Lanka's tea export earnings rose 13% YoY to about $1.40 billion in January–November 2025. Cumulative volumes increased to 239.57 Mnkg, while average FOB fell modestly in rupee terms and averaged $5.85/kg in dollar terms.

ADB approved a $3 million grant to construct four pilot pipe distribution network (PDN) systems to irrigate 877 hectares in North Western and Uva Provinces, providing irrigation to 943 farming households to improve water efficiency and support agricultural recovery.

Hayleys PLC's agriculture arm won multiple honours at the Presidential Export Awards 2024/2025: HJS Condiments was named Best Exporter – Processed Fruits & Vegetables, Quality Seed Company won Best Exporter – Floriculture, and Hayleys Agro Biotech received a Merit Award, recognising strong export performance and innovation.

The Planters’ Association of Ceylon says Regional Plantation Companies activated emergency responses after Cyclone Ditwah, relocating vulnerable estate families, restoring access, and providing food, lodging and medical support while damage assessments and longer-term rehabilitation planning continue.