Deputy Minister of Finance and Planning Anil Jayantha Fernando said the economy is set to maintain strong growth next year. He expects expansion supported by reconstruction activity and continued external financing.
Speaking to Reuters, he said growth would match this year’s pace and exceed projections by the International Monetary Fund. He added that rebuilding work after Cyclone Ditwah will support economic momentum.
Impact of Cyclone Ditwah
The cyclone struck in late November and caused widespread destruction. Nearly 650 people lost their lives, while about 10% of the population was affected.
The disaster damaged roads, railways, farms, and tea estates. Authorities estimate rebuilding costs at up to US$7 billion, adding pressure to recovery planning.
Multilateral and Emergency Funding
The country continues to receive support under an IMF bailout programme. In addition, global agencies and foreign governments pledged emergency ass
Deputy Minister of Finance and Planning Anil Jayantha Fernando – BusinessNews.LK
istance after the disaster.
Fernando said the Asian Development Bank committed US$200 million, while the World Bank pledged US$120 million. He added that the IMF is expected to approve a further US$200 million in emergency funding.
He said swift responses and existing development programmes will prevent a slowdown. Instead, reconstruction investment is likely to lift growth further.
Growth Projections and Budget Measures
The Deputy Minister said growth this year will exceed 5%, above the Central Bank’s 4.5% projection. He based this view on economic performance during the first three quarters.
He expects similar growth next year. By contrast, the IMF forecasts 3.5% growth in 2025 and 3.1% the following year.
To fund recovery, the government plans to reallocate spending and use tax revenue. Parliament is expected to approve Rs. 500 billion in supplementary spending this week.
In addition, the government has earmarked Rs. 1.4 trillion for capital expenditure in 2026. A portion will support post-cyclone reconstruction.
Foreign Investment and Major Projects
Foreign investment remains central to the recovery strategy. Fernando said negotiations with China’s Sinopec for a US$3.4 billion oil refinery are nearing completion.
He said authorities aim to sign the agreement by the end of the year or early next year. The refinery will process 200,000 barrels per day and will operate near the Hambantota port.
Officials approved the project in 2023. Earlier delays stemmed from fuel sales conditions, which the government is now reviewing.
IMF moves to fast-track $200m emergency funding for Sri Lanka
Last modified: December 18, 2025
