News & market updates

DFCC Bank convened a discussion examining how the Middle East conflict could transmit into Sri Lanka’s economy, highlighting energy price, shipping, FX, tourism and remittance channels. The forum emphasised banks’ role in helping clients manage FX exposure, trade finance and liquidity amid rising uncertainty.

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.

Anura Karunathilaka was appointed Energy Minister and will continue to hold the Ports and Civil Aviation portfolio after Kumara Jayakody resigned amid allegations linked to a coal procurement scam.

Heads of Multilateral Development Banks agreed to deepen cooperation to provide timely support to countries amid global uncertainty, prioritising mobilisation of private finance, scaling local-currency financing, and joint initiatives on critical minerals, water infrastructure and AI.

U.S. stocks retreated as Mideast tensions sent oil up about 5% to $88.21/bbl (Brent $94.86), while 10-year Treasury yields ticked higher and the dollar eased.

Fitch said the risk outlook for global credit has risen “substantially”, citing the US war on Iran and a possible sustained oil and gas supply shock that raises commodity and energy price assumptions. It also kept Sri Lanka at 'CCC+', constrained by high government debt and interest/revenue ratios despite reform progress.

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.

Colombo Stock Exchange slipped 0.39% midday to an ASPI of 22,684.52 as investors were unsettled by evolving Middle East tensions. John Keells Holdings and Central Finance were top negative contributors; Windforce announced intra-group transfer of three subsidiaries to Renewgen and its stock was down 0.84% at Rs.47.00.

The Petroleum Dealers’ Association has written to the President seeking intervention after CPC's Circular No.1109 (effective 1 March 2025) replaced percentage-based commissions with a capped tiered per-litre system that dealers say cuts earnings. Dealers warn incomes no longer cover salaries, loan repayments, VAT and working capital, and have requested an expert committee including dealer representatives to resolve the issue.

Jazz deployed solar systems at 1,000 telecom sites with Huawei, totaling 13 MW capacity and expected to generate about 11 GWh annually, cutting carbon emissions by roughly 15,000 tonnes while improving network reliability.

The EU, via the AICRSL project implemented by UNIDO, handed over advanced Solar PV training and demonstration equipment to five Sri Lankan Technical Colleges (Gampaha, Matara, Badulla, Warakapola and Jaffna) to enable accredited solar PV training. The Rs.2.8 billion EU-funded project aims to cut industrial GHG emissions by 13% by 2035.

IMF congratulated Sri Lanka on reaching a staff-level agreement on the combined fifth and sixth reviews under the Extended Fund Facility and reaffirmed continued support for the country's economic recovery. IMF officials urged restoring cost-reflective energy pricing and maintaining reform momentum.

Sri Lanka received its first crude shipment for the Sapugaskanda refinery, bought at $71.99/barrel, the Deputy Energy Minister said. Two more shipments are due (Apr 29 at $71/barrel and mid‑May at $113/barrel); the refinery has lost efficiency using non‑Murban crude and CPC has ordered WTI.

Sri Lanka's Energy Minister Punya Sri Kumara Jayakody and Energy Ministry Secretary Udayanga Hemapala resigned effective Apr 17 to allow an independent Special Presidential Commission inquiry into alleged irregularities in coal imports and related electricity generation. The resignations follow a no-confidence motion and allegations of procurement corruption.

Fitch published a National Long-Term Rating of 'A(lka)' on WindForce PLC's proposed senior unsecured redeemable debentures of up to LKR4 billion. Fitch cited WindForce's growing scale and PPAs but flagged high capex (~LKR40bn), leverage peaking at 9.0x in FY27 and concentration of cash flows from state-owned offtaker NSO.

IMF urged Sri Lanka to maintain its reform momentum as rising global oil and gas prices pose renewed risks to the recovery. It noted improved fiscal performance and near-completion of sovereign debt restructuring, while warning support for those hit by energy costs must be targeted and temporary.

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.

Asian stocks were set for a second week of gains as oil fell below $100, with Brent at $98.14/bbl and WTI at $93.15, after hopes for a near-term Middle East ceasefire eased energy-market acute stress.

ADB economist Liliya Aleksanyan warned the central bank's depreciation of the rupee from 300 to 315 has amplified the cost of imported oil and added to monetary inflation. The ADB expects inflation could rise to 5.2% in 2026 amid excess liquidity from buy-sell swaps.

The U.S. nearly became a net crude exporter last week as exports rose to about 5.2 million bpd and net imports narrowed to 66,000 bpd, driven by supply disruptions from the Iran war. Analysts warn exports are nearing capacity (~6 million bpd) amid tanker and freight limits.

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.

The G-24 warned that rising global risks — including geopolitical tensions, higher energy prices, elevated inflation and tighter financing — threaten fragile recoveries in economies like Sri Lanka. The group urged more concessional finance, faster debt restructuring and stronger multilateral 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 cut its global growth outlook and warned the world is drifting toward a more adverse scenario, saying an adverse path could keep oil near $100/barrel and trim global growth to about 2.5%. It presented three scenarios (reference, adverse, severe) with the severe case pushing oil to $110–$125 and global growth to 2.0%.

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.

IEA, IMF and World Bank issued a joint statement saying the war in the Middle East has driven up oil, gas and fertilizer prices, disproportionately hurting energy importers and threatening food security, jobs and tourism. They said they will coordinate assessments and provide policy advice and financial support.

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 U.S. military began a blockade of Iran’s ports while hopes for dialogue pushed benchmark oil prices below $100. The blockade heightens uncertainty for global energy supplies and shipping through the Strait of Hormuz.