With ceasefire in Middle East, time to look at next steps

Thursday, 9 April 2026 00:00 - - {{hitsCtrl.values.hits}}

By Bingumal Thewarathanthri

7 April marks a historic day for the world. The Iran-US-Israel war has declared a two weeks ceasefire. While the success of this ceasefire is unknown, it is a critical time for the countries and corporates to look at the next steps.

While oil has come down in price, it’s prudent to forecast the average price right for the next 6-9 months taking different scenarios. Supply side shocks will drive inflation but the solution will not come from typical tightening monetary policy.

Countries will have to make sure the availability of oil, fertilizer and related items, reduce entry barriers (reduce taxes/reduce price, liberalize crude related imports), support key sectors (i.e for Sri Lanka tourism, exports, shipping, airline and domestic transportation), and manage the exchange rate. Companies should take a medium to long term view and lock supply chain to avoid stock shortages that can impact production.

As a country, Sri Lanka has taken many good measures while meeting IMF targets. I hope the ceasefire lasts forever and things will settle down. But the world will not be the same. Better be prepared.