News & market updates

IMF and officials say Cyclone Ditwah will likely cause a temporary GDP hit in 2026, probably concentrated in one quarter, with reconstruction expected to partly offset the output loss but push short-term inflation and widen the current account. Some distilleries were reported flooded, hurting production and revenues.

President Anura Kumara Dissanayake said Sri Lanka will pay farmers up to Rs2 million for lost cross-bred cattle after Cyclone Ditwah and has sought parliamentary approval for an extra Rs500 billion for cyclone relief in 2026. Payments include Rs200,000 per cross-bred cow (capped at 10), Rs50,000 per local cow (up to 20) and Rs20,000 per pig/goat/sheep (up to 20).

Sri Lanka will pay 150,000 rupees per damaged hectare to rice farmers as a non-financial 'pain of mind' compensation after Cyclone Ditwah; vegetable/fruit farmers will receive 200,000 rupees/ha and spice growers 250 rupees per creeper.

Department of Agriculture data, compiled with FAO support, shows widespread flood damage to paddy, vegetables and other field crops across several major agricultural districts in Sri Lanka, threatening smallholder livelihoods and household food security. FAO and national authorities are assessing damages and prioritizing recovery and rehabilitation.

Sri Lanka and the ADB signed a $3.00m grant (plus $1.63m government counterpart) to fund pilot climate-resilient pipe irrigation schemes covering about 877 hectares in the Dry Zone, with implementation scheduled for 2026–2029 to boost water efficiency and food security.

Government will compensate cyclone-hit chicken farmers Rs.500 per dead layer (up to 2,000 birds) and Rs.250 per dead broiler (up to 4,000 birds), capped at Rs.1 million per farmer. Cyclone Ditwah is estimated to have killed 500,000 layers and 1.4 million broilers, risking short-term shortages and price rises.

The Government of Sri Lanka and ADB signed a grant agreement mobilizing USD 3.00m from JFPR plus USD 1.63m counterpart funding for a Transforming Irrigation Systems for Improved Food Security Project to implement four pilot pipe distribution networks covering ~877 hectares from 2026–2029.

Cyclone Ditwah damaged 1,277 small tanks, 1,271 anicuts and 3,229 irrigation waterways in Sri Lanka, Deputy Minister Namal Karunaratne told parliament. The government said repairs are underway, damage ranges from slight to total, and the figures are still being updated.

Colombo Stock Exchange closed lower with the ASPI down 0.64% (143.48 points) at 22,149 and turnover Rs 3.45bn; Commercial Bank, Lion Brewery, Carson Cumberbatch and Ceylon Grain Elevators led gains while Dockyard weighed on the index.

Colombo Bourse closed lower with the ASPI down 0.17% (37.12 pts) to 22,292.57 on subdued activity and profit-taking, with turnover over Rs.2.3bn. Top negative contributors included DOCK, SFCL, RICH, MELS and BREW, while Tokyo Cement and Hemas saw notable investor participation.

Industries Minister Sunil Handunnetti told Parliament that 29,649 businesses have registered as Cyclone Ditwah-affected and damages for over 10,000 have been assessed. The government released Rs1bn, will pay Rs200,000 per reported business and offer 3% loans under an Rs80bn 2026 allocation.

FAO and Sri Lanka’s Department of Agriculture maps show about 58,340 hectares of paddy in Trincomalee and Batticaloa were affected by floods from Cyclone Ditwah. The maps also show damage to vegetables and other field crops across major agricultural districts, threatening smallholder livelihoods and household food security as FAO works with authorities on assessment and recovery.

Colombo market closed flat as the ASPI slipped 0.02% to 22,329.69 with turnover of Rs. 3.32 billion; top negatives were Commercial Bank, DFCC, Richard Pieris, Bukit Darah and John Keells while Carson Cumberbatch, Browns Investments and LOLC Finance provided support.

Sri Lanka forecasts GDP growth of more than 5% in 2026, driven by post-Cyclone Ditwah reconstruction and planned capital spending. The government cited incoming donor/IMF support and said a $3.4bn Sinopec refinery deal is near finalisation to help spur investment.

The Cabinet approved raising the cost estimate for the Lower Malwathu Oya Multi-Purpose Development Project to Rs.47.18 billion and extended the completion date to 31 December 2030. Implementation will be locally funded and the project aims to expand irrigation across about 30,000 acres, add hydropower and improve drinking water.

Cabinet approved milling and release of 49.5 million kilos of paddy purchased in the Yala season (procured for Rs. 5,949 million) into the domestic market. PMB stocks will be milled by PMB-registered private mills and distributed via Lak Sathosa and cooperative outlets, with the government considering concessional pricing and urging traders to keep staple rice prices reasonable.

Tea production in Sri Lanka fell to 21.45 Mnkg in November 2025, down 1.28 Mnkg year-on-year; however, cumulative January–November output rose 0.7% to 242.57 Mnkg.

The agricultural pension payment window has been extended to December 31 so farmers can collect December pensions at post offices or sub-branches during working days. Currently 178,753 farmers and 6,312 fishermen receive pensions, with Rs 413 million paid for December.

Kelani Valley Plantations PLC was named Patron of the UN Global Compact Network Sri Lanka’s Water & Ocean Stewardship Working Group and its Dunedin skim rubber factory reduced freshwater use by 50% (15,000 litres/day), cutting wastewater 19% and saving ~LKR 15.6m annually.

Colombo market recovered as the ASPI rose 0.17% (38.48 pts) to 22,333.25 and the S&P SL20 gained 0.31% to 6,071.12. Turnover was Rs 2.85bn on ~77.2m shares with foreign net outflows of Rs 42.8m; top contributors included DOCK, COMB, SAMP, MELS and DFCC.

Sri Lanka signed a $200 million loan agreement with the Asian Development Bank to fund the Mahaweli Water Security Investment Program (MWSIP) Stage 2. The project will partly finance completion of canal and tunnel irrigation works (about 7km tunnel, ~68km of canals) and distribution networks to boost agricultural productivity and climate resilience in the North Central Province.

World Bank Group will make up to $120 million available by repurposing existing project funds to support Sri Lanka's recovery from Cyclone Ditwah, restoring healthcare, water, education, agriculture and infrastructure. The IFC will also provide advisory support and targeted investments to bolster agriculture, manufacturing, logistics and MSMEs.

Sri Lanka will move a Rs500 billion supplementary estimate into next year’s budget to fund reconstruction after Cyclone Ditwah, which left over 800 dead or missing, damaged roads (RDA estimates Rs190bn) and destroyed 108,000 ha of paddy. The World Bank will repurpose $120m and the IMF has pledged $200m in fast-disbursing support.

World Bank is providing $120mn to Sri Lanka by repurposing existing project funds to support cyclone recovery. The emergency support will restore health care, water, education, agriculture and connectivity, and IFC will offer advisory support and investments to agriculture, manufacturing and logistics while a GRADE assessment seeks further financing.

World Bank is making up to US$120 million in emergency support available to Sri Lanka by repurposing funds after Cyclone Ditwah. The support will restore essential services (health care, water, education, agriculture, connectivity) and the IFC will provide advisory and investments to help private-sector recovery (agriculture, manufacturing, logistics, MSMEs).

Sri Lanka's GDP grew 5.4% in Q3 2025. Agriculture rose 3.6%, manufacturing 8.1% and services 3.5%, with insurance up 18%, financial services 13.2%, accommodation/food 9.3% and IT services 8.5%; central bank stability supported activity despite a weakening rupee.

Sri Lanka's economy grew 5.4% year-on-year in Q3 2025 to Rs. 3,325.6 billion (2015 prices). Industrial activity rose 8.1%, agriculture 3.6% and services 3.5%, supported by higher tourist arrivals, domestic credit expansion and stronger construction, manufacturing and services.

ADB upgraded Sri Lanka’s GDP growth forecasts for 2025–26, citing robust private-sector credit growth, stronger industry and services performance, and planned infrastructure investment. The report flagged Cyclone Ditwah risks and revised inflation forecasts downward.

Pushpika Janadheera, Managing Director of Dipped Products PLC, was reappointed Chairman of SLAMERP at the Association’s AGM. SLAMERP is lobbying on US tariffs and the proposed SVAT removal and is working to strengthen rubber export competitiveness and supply chains.

Sri Lanka's average coconut price at the weekly auction fell 1.5% to 112,740.72 rupees per 1,000 nuts as nuts offered rose to 409,302 and nuts sold rose to 278,343. Local wholesale and retail price ranges and copra/coconut oil prices were also reported.