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Sri Lanka's 2022 economic crisis was not merely a result of poor fiscal and monetary policy but also the direct consequence of a deep-rooted, systemic accountability deficit. Termed Sri Lanka's "third deficit" (alongside its chronic budget and trade deficits), this governance failure enabled catastrophic policy decisions, such as the 2019 tax cuts, to proceed without institutional challenge.

Despite many challenges, the Inland Revenue Department (IRD) has made significant strides in digitalisation.

India’s ban on the export of raw, white and refined sugar affects sugar availability in Sri Lanka. In 2025, India accounted for 50% of Sri Lanka’s 656,381 metric tonnes of sugar imports.

Sri Lanka will face fresh tariff troubles this year with its exports to its top export market - the United States. The United States has proposed a new tariff of up to 12.5% on imports from Sri Lanka and 59 other economies following investigations into whether countries have adequately prohibited imports produced using forced labour.

In a world where over 270 million people live amid conflict zones, the ripple effects reach far beyond borders — reshaping economies, energy security, and everyday lives. What do these global tremors mean for Sri Lanka?

Sri Lanka imports almost 100% of the fertiliser used, so our agriculture sector is highly vulnerable to import and energy price shocks.

In the first issue of Lanka Dispatch, we move beyond quarterly updates on China-Sri Lanka relations to look at something broader: how our island navigates a world that is fragmented and volatile.

Inflationary pressures are building in Sri Lanka as it faces the direct and indirect effects of the US-Israel war on Iran.

Arutha's Co-Founder and Director-Civic Education, Rehana Thowfeek, spoke to ABC Asia on how the war in the Middle East will affect Sri Lanka in the short term and long term and whether Sri Lanka was adequately geared for the shock. She explained that since the crisis, Sri Lanka has rebuilt some macroeconomic buffers. Foreign exchange reserves are in good shape, and the government's fiscal measures allowed for additional spending on Ditwah recovery. Inflation has remained low,

Arutha's Civic Education and Outreach Consultant, Amalini De Sayrah speaking to The Morning on the new Microfinance bill explained the implications of reliance on the microfinance sector by the vulnerable amidst crises. “People are likely to take, or have already taken, loans to help rebuild their homes or livelihoods. They are then faced with twice the pressure to repay: repaying these new loans and repaying any loans they had taken before the disaster. At a time when they

Sri Lanka’s food security is under pressure amid rising global fertiliser prices. Global fertiliser prices are 30–40% above pre-conflict levels, driving up costs for local farmers and threatening domestic yields. 57% of Sri Lanka's fertiliser comes from China and 22% is from suppliers in the Middle East. China has halted exports of its fertiliser to preserve its own domestic food production. Rising fertiliser costs in India have resulted in food price increases and export res

Arutha's Co-Founder and Director-Civic Education, Rehana Thowfeek, spoke to The Morning about the impact of the ongoing conflict on Sri Lanka recovery and how it will impact energy prices and inflation. She noted that inflation has been relatively low for the past two years, however, given the increasing prices of fuel and gas, there will be a cascading effect on prices and the cost of living if supply chain disruptions persist. She also noted that Sri Lanka has high exposu

The impact of the war depends on how long it lasts and how far it spreads; if it ends in a few weeks, stability can return in a few months. If it continues for months, it will take years for the global economy to stabilise.

Exports of Sri Lankan goods to the Middle East Region amounted to $1,215 million in 2025 – approximately 11% of the country's total revenue from goods exports. The United Arab Emirates is Sri Lanka’s largest Middle Eastern goods export market, worth $334 million in 2025. 57% of exports to the Middle East are tea, coffee and spices. Global shipping rates will rise due to the on-going conflict. The closure of the Strait of Hormuz affects supply and demand into the region. This

The government has begun phasing out para-tariffs. The 2026 budget announced this. The phased removal of cess will happen from 2026 to 2029. The 2026 budget expects to collect Rs 87.6 billion from import cess. This will increase to Rs 94 billion in 2027 and Rs 100.5 billion in 2028. This shows a gap between the para-tariff phase-out plan and revenue predictions. Para-tariffs are taxes on imports that are beyond the standard customs duty. Para-tariffs make imports like raw mat

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