Economy

Sri Lanka’s inflation could rise to 7% amid Middle East conflict and higher fuel prices – CBSL Governor

Published

3 months ago

June 3, 2026

Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe, has warned that the country’s inflation rate could increase to 7% due to the ongoing conflict in the Middle East and rising global fuel prices.

Speaking on the “360” programme aired on TV Derana last night (01), Dr. Weerasinghe stated that although it was initially anticipated that the Middle East conflict would be resolved in the short term, its prolonged duration has had significant repercussions on Sri Lanka’s economy.

He noted that fuel prices have continued to rise, creating upward pressure on inflation. According to the Governor, inflation, which is currently projected at around 5.4% to 5.5%, is likely to increase further if present trends continue.

“We have observed a continuous increase in fuel prices, while consumer demand has not shown any significant decline. Therefore, there is a risk that inflation could move beyond 5% and even reach 7% if these conditions persist,” he said.

Dr. Weerasinghe explained that the Central Bank recently tightened its monetary policy as a precautionary measure to curb inflationary pressures. He added that reducing demand over the coming months would be essential to prevent inflation from accelerating further and to maintain economic stability.

Meanwhile, the Central Bank Governor emphasized that there are no restrictions on remitting legally earned funds to Sri Lanka through the formal banking system.

Economy

Sri Lanka Sees 27.2% Jump in State Income in First Half of 2026

Published

2 days ago

September 11, 2026

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Prime Minister Dr. Harini Amarasuriya outlined in Parliament the significant increase in government revenue recorded during the first six months of 2026, highlighting strong growth in both tax and non-tax income.

The Prime Minister stated that tax revenue, which stood at Rs. 2,152.1 billion during the first six months of 2025, increased by 25.9% to Rs. 2,710.6 billion during the corresponding period of 2026.

She further noted that revenue collected by the Inland Revenue Department rose from Rs. 1,037.9 billion in the first half of 2025 to Rs. 1,247.6 billion during the same period in 2026, reflecting a growth of 20.2%.

According to the Prime Minister, non-tax revenue also recorded a substantial increase. Revenue from non-tax sources rose from Rs. 169.6 billion during the first six months of 2025 to Rs. 243.6 billion during the corresponding period this year, marking a significant growth of 43.6%.

As a result, total tax and non-tax revenue increased from Rs. 2,321.7 billion in the first half of 2025 to Rs. 2,954.2 billion during the same period of 2026, representing an overall growth of 27.2%.

Dr. Amarasuriya explained that the increase in revenue collected by the Inland Revenue Department, Sri Lanka Customs, and the Excise Department had been the primary drivers behind the rise in overall government revenue.

Economy

Vehicle imports generate Rs. 512.5 billion in tax revenue

Published

5 days ago

September 8, 2026

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Sri Lanka imported 316,000 vehicles during the first six months of 2026, generating Rs. 512.547 billion in tax revenue, according to officials from Sri Lanka Customs.

The figures were revealed during a review of the operations and revenue performance of Sri Lanka Customs by the Parliamentary Committee on Ways and Means.

Of the total tax revenue generated through vehicle imports, motor vehicles imports accounted for the largest share, contributing Rs. 386.726 billion.

Petrol-powered cars with engine capacities below 1,000cc emerged as the highest revenue-generating category, contributing Rs. 137.4 billion in Customs revenue. This represented 9.96% of total Customs revenue.

Meanwhile, Sri Lanka Customs recorded total revenue of Rs. 1.379 trillion by June 30, 2026, against an expected revenue of Rs. 1.061 trillion for the period, representing 130% of the targeted revenue.

Officials informed the committee that customs revenue had exceeded monthly targets throughout the year and had recorded higher revenue compared with the corresponding months of 2025.

Economy

Rs. 5.8bn World Bank-backed project to rehabilitate 296 irrigation tanks

Published

7 days ago

September 6, 2026

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Sri Lanka has begun rehabilitating 296 minor irrigation tanks under a World Bank-funded programme aimed at strengthening irrigation infrastructure and improving climate resilience.

More than Rs. 5.8 billion has been allocated for the work under the Integrated Rurban Development and Climate Resilience Project (IRDCRP), which is planned to continue until 2029.

Of the 296 tanks, 290 are located across 18 districts and were damaged by Cyclone Ditwah. About Rs. 5.58 billion has been allocated for their rehabilitation under the project’s Contingent Emergency Response Component.

The largest number of affected tanks is in Badulla, where 97 are being rehabilitated, followed by Ratnapura with 29, Mannar with 24 and Kurunegala with 19. Fifteen tanks each are being rehabilitated in Kandy and Vavuniya.

A further six minor irrigation tanks in Polonnaruwa, Hambantota and Jaffna are also being rehabilitated at a cost of about Rs. 256.2 million.