CBSL Governor to outline policy agenda for 2026 on 8 Jan.

Saturday, 3 January 2026 00:42 - - {{hitsCtrl.values.hits}}

CBSL Governor Dr. Nandalal Weerasinghe

Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe will announce the bank’s policy agenda for 2026 next Thursday (8 January) amid concerns of external sector and inflationary pressures post-Ditwah.

The CBSL is hosting an event titled ‘Central Bank’s Policy Agenda for 2026 and Beyond’ intended to set out the institution’s policy priorities for the coming year and the medium term.

Central Bank Governor Dr. Nandalal Weerasinghe, speaking at the Sri Lanka Investment and Economic Summit shortly after Cyclone Ditwah on 2 December 2025 and reiterating his assessment nearly a month later on national television, maintains an optimistic outlook on Sri Lanka’s post-cyclone economic recovery.

He said the economy could record stronger-than-expected growth in 2026, supported by increased public spending on reconstruction, while noting that it remains too early to fully assess the cyclone’s overall economic impact.

The Governor has said that baseline growth projections had previously been placed in the 4–5% range. However, additional stimulus from recovery and reconstruction expenditure could lift economic activity further, provided implementation is efficient and delays are minimised.

Dr. Weerasinghe said economic performance in 2023 had exceeded earlier expectations, with growth approaching 5% by the third quarter. While the impact of Cyclone Ditwah in the fourth quarter is still being evaluated, he indicated that overall growth for the year is likely to remain close to that level.

Prior to the cyclone, growth projections for the next few years were in the range of 4 to 5%. With recovery and reconstruction spending now added, economic activity in 2026 could be higher, the CBSL chief noted.

He said the Government has allocated Rs. 1.4 trillion for public investment in 2026, with a further Rs. 500 billion expected to be added for cyclone recovery efforts. This additional spending, particularly in construction and related sectors, is expected to provide further momentum to growth.

At the same time, the Governor cautioned that stronger demand for goods, services, and labour could place upward pressure on prices. Inflation, which has been around 2%, is projected to rise to about 5% by the third quarter of 2026, though stronger demand could accelerate that timeline.

Dr. Weerasinghe also highlighted potential implications for the external sector, noting that higher domestic spending would increase demand for imports such as construction materials and fuel, with possible pressure on the trade balance.

To manage these pressures, he said Sri Lanka would need to strengthen foreign exchange inflows through exports, tourism, and, where necessary, additional external financing in the form of loans and grants.

While the outlook points to upside potential for growth, the Governor stressed that actual outcomes would depend on how quickly and effectively recovery spending is executed, warning that procurement and implementation delays could constrain the expected gains. It is still too early to factor in everything, he said.