Business

Sri Lanka property developers seek to re-start work, clarity on import controls

Saturday April 18, 2020 6:54 pm

ECONOMYNEXT – Sri Lanka’s property developers have asked President Gotabaya Rajapaksa to start work which had been halted to stop Coronavirus and also sought clarity on import controls proposed as the central bank injected liquidity de-stabilizing the rupee.

The Condominium Developers Association of Sri Lanka (CDASL) asked President to allow the commencement of Construction Projects as soon as practically possible and include property firms among those eligible to get credit relief.

Sri Lanka’s politicians have said that all imports other than medicine and fuel would be banned and the public had been asked to grow kollu (horse gram) and other grains and vegetable as the central bank printed money and generated forex shortages.

“There is some ambiguity on imports of building materials and equipment since the authorities have made statements regarding imports being restricted to essential items only,” the CDASL said in a statement.

“A clarification on this would be helpful to avoid further disruption in project supply chains.”

The association also asked for relief from para tariffs on imported inputs and to ease cashflow pressures on developers and contractors.

The developers said allowing foreigners based in Sri Lanka to get apartments with their domestic earnings, without having to remit from overseas and allowing expats to get a part of their finance from domestic banks would also help.

Liberalizing resident visas would also help.

The full statement is reproduced below

April 17th, 2020
H.E. Gotabaya Rajapaksa
President of the Democratic Socialist Republic of Sri Lanka
Presidential Secretariat
Colombo 01

Re: Relief for the Property Development and Construction Industry

Your Excellency,

The Condominium Developers Association of Sri Lanka (CDASL) sincerely appreciates all efforts taken by you and your government to curb the spread of COVID-19 and ensure the welfare of our citizens. We are also aware of and appreciate all the measures the government has put in place in its effort to minimize impacts on the economy.

As you may be aware, the property development industry employs hundreds of thousands of people, both directly and indirectly, throughout Sri Lanka. This includes direct employees of development companies, a large number of professionals and technical personnel, as well as vast numbers of construction workers who are highly vulnerable to economic shocks.

The property development industry is the primary employer and revenue source for the majority of professional construction firms, as well as thousands of SMEs across the economy, from small scale building material providers, to manufacturers and installers of a range of finished goods and equipment.

A slowdown in development activity will have immediate impacts on these firms (and their employees) which will only get resolved when development projects are able to move forward. As such, we would like to propose the following measures to help our industry get back on its feet:

1. Permit and facilitate the commencement of Construction Projects as soon as practically possible.

All construction sites in Sri Lanka are suspended, and with them employment and income for many thousands of workers and SMEs. A resumption of work in construction could be done based on clear regulations and restrictions as advised by the government’s health authorities.

2. Include Property Developers among the list of industries/sectors eligible for financial concessions recently announced by the Central Bank to help with working capital/cashflow pressures.

With very large capital outlays for our projects, developers are among the first to go into financial distress with an economic downturn. The cascading effect of suspension of development projects will ripple through the economy at multiple levels as banks, personal investments of homebuyers, and hundreds of thousands of jobs will be at risk. Clear guidelines need to be issued to banks and the financial sector on preferential interest rates, loan moratoriums etc.

3. Direct the BOI to extend the Project period permitted under the BOI agreements for projects which are currently underway and impacted by the shutdown.

All construction sites have been shut down and global supply chains for materials and equipment are severely impacted. Given these circumstances, delays in construction projects are unavoidable, and ensuring BOI concessions are extended to accommodate such unavoidable delays would be critical to ensuring viability of many of these projects.

4. Permit the importation of Project related materials

There is some ambiguity on imports of building materials and equipment since the authorities have made statements regarding imports being restricted to essential items only. A clarification on this would be helpful to avoid further disruption in project supply chains.

5. PAL, CESS and other such levies to be waived on Project related material for a stipulated time period to stimulate the development activities and reduce cost structures.

Relief on para tariffs for project specific imports will reduce cashflow pressures on developers and contractors alike in the current revenue-constrained environment and help projects to keep moving.

6. To encourage new investments greater than a stipulated value by granting very attractive concessions.

Sri Lanka needs new investments to move forward and grow. With a global slowdown, attracting new FDI and launching new investments will be substantially harder. Highly concessional terms will be needed to ensure viability of projects that can be kicked off in the coming year or two. We trust the government will put in place aggressive concessions to stimulate investment in new projects as well.

7. To fast-track the implementation of REITs and related legislation/regulations.

The slowdown of the economy both locally and internationally will inevitably cause a drop in land and property valuations which in turn will substantially expose banks who often use land and property as collateral for lending. Creating an enabling legal/tax environment for the launch of REITs would help mobilize more equity capital/FDI and also stimulate more long-term investment in the real estate space, which in turn could help stabilize property prices.

8. Encourage foreign buying/investment in Sri Lankan real estate

Given the Government’s strategic approach to managing the COVID outbreak, Sri Lanka is emerging among the countries displaying effective crisis management capability and resilience. This is a huge positive and could encourage foreign investment especially in the Property Sector.

With this in view, it would be prudent to fast-track efforts to encourage more foreign buying of real estate, thereby opening the potential for substantial FDI as well stimulate demand in the property market.

Allowing foreigners currently based in Sri Lanka to purchase apartments with their domestic earnings (without having to remit from overseas), allowing expats to finance a portion of their purchase price through domestic banks in LKR provided the major part is remitted from overseas , and liberalizing regulations for long term resident visas are among some of the interventions that would help in this regard.

On behalf of the Condominium Developers Association of Sri Lanka, I would appreciate if you would consider the above points, and take necessary measures to ensure the continued viability of property development as a major driver of employment, economic development, and urban transformation of Sri Lanka.

Sincerely,

……………………………………
Condominium Developers Association of Sri Lanka

Markets

Sri Lanka stocks open higher; ASPI gains 0.21-pct

Friday October 23, 2026 10:50 am

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange opened higher on Friday, CSE data showed, with the benchmark All Share Price Index moving up 0.21 percent.

The ASPI was up 41.16 points at 19,759.08, while the more liquid S&P SL20 was down 0.10 percent, or 5.41 points, at 5,613.07.

Positive contributors to the ASPI were Richard Pieris and Company (up 3.15 percent at 26.20 rupees), Dialog Axiata (up 1.18 percent at 42.90 rupees), and Vallibel Finance (up 1.06 percent at 76.50 rupees).

Commercial Bank of Ceylon (down 0.13 percent at 196.00 rupees), Hayleys (down 1.60 percent at 215.00 rupees), Hatton National Bank (down 0.20 percent at 370.50 rupees), and Overseas Realty (Ceylon) (down 0.42 percent at 47.80 rupees) were top negative contributors.

Market turnover was 296.44 million rupees. Banks led turnover with 127.96 million rupees. (Colombo/Oct23/2026)

Bonds & Forex

Sri Lanka rupee weaker at 332.35/42 to US dollar spot, bond yields steady

Friday October 23, 2026 10:08 am

ECONOMYNEXT – Sri Lanka’s rupee was quoted weaker at 332.35/42 to the US dollar in the spot market on Friday, from 332.20/35 the previous day, while bond yields were steady, dealers said.

A bond maturing on 15.09.2029 was quoted flat at 11.05/15 percent.

A bond maturing on 01.08.2030 was quoted at 11.50/58 percent, down from 11.55/60 percent.

A bond maturing on 01.02.2031 was quoted at 11.70/80 percent, from 11.73/78 percent.

A bond maturing on 01.12.2031 was quoted at 11.85/12.00 percent, down from 11.90/12.00 percent.

A bond maturing on 15.12.2032 was quoted flat at 12.00/10 percent.

A bond maturing on 15.01.2033 was quoted flat at 12.20/25 percent.

A bond maturing on 15.10.2034 was quoted at 12.45/50 percent, up from 12.40/50 percent.

The telegraphic transfer rate for the dollar was 327.75 buying, 336.75 selling; the euro was 364.8954 buying, 378.6762 selling; pound was 437.9916 buying, 452.1000 selling.

On the Colombo Stock Exchange the All Share Price Index was up 0.34 percent, or 67.54 points, at 19,785; while the S&P SL20 was up 0.39 percent, 22.14 points, at 5,640. (Colombo/Oct23/2026)

Op-ed/Special Reports

Beyond recovery: Policy priorities to achieve durable growth in Sri Lanka

Thursday October 22, 2026 9:46 pm

ECONOMYNEXT – Sri Lanka must sustain macroeconomic stability through productivity-enhancing reforms, stronger export competitiveness and higher investment if it is to achieve durable long-term growth and return to its pre-crisis trajectory, a Colombo-based think tank has said.

While the island’s recovery from its economic crisis has been encouraging, growth remains vulnerable to external shocks, weak competitiveness and low investment, researchers and economists of the Institute of Policy Studies (IPS) said at a roundtable discussion on its publication, Sri Lanka State of the Economy 2026.

Sri Lanka would need average annual growth of about 8.3 percent between 2026 and 2030 to regain its pre-crisis growth path, exceeding the government’s medium-term target of 7 percent growth, IPS Research Fellow Asanka Wijesinghe said.

Sri Lanka’s economy expanded 4.2 percent in the second quarter of 2026, supported by a pickup in investment, but rising imports and higher global fuel prices have widened external sector pressures, he said.

Wijesinghe warned that growth driven largely by domestic demand would be insufficient and stressed the need to expand exports to support higher growth.

He said Sri Lanka’s export competitiveness is under pressure as competing economies negotiate preferential trade agreements with key markets.

Indonesia’s access to the European Union market and India’s trade agreement with the United Kingdom could erode Sri Lanka’s relative position, while any loss of existing trade preferences such as GSP+ would further weaken competitiveness.

To address these risks, Sri Lanka should accelerate tariff reforms, simplify its tariff structure and secure more predictable market access abroad, while providing support for industries and small firms adjusting to increased competition, he said.

IPS Research Fellow Lakmini Fernando said fiscal policy must move beyond crisis stabilisation and support long-term growth by increasing productive investment.

She noted that government capital expenditure had fallen to historically low levels during the adjustment period and said achieving 7 percent growth could require gross fixed capital formation equivalent to between 30 and 42 percent of GDP, depending on investment efficiency.

Fernando called for greater investment in education, healthcare, skills development, social protection, climate-resilient infrastructure and green projects, alongside reforms to public financial management and procurement systems.

She also stressed the need to maintain debt sustainability through stronger fiscal institutions, adherence to a medium-term debt management strategy and continued engagement with international financial institutions.

Central Bank Deputy Director of Economic Research Yashodha Senadheera said monetary policy has limited ability to directly offset supply-side shocks but may need to respond when such shocks create persistent inflationary pressures or threaten inflation expectations.

Asian Development Bank Senior Country Economist Liliya Aleksanyan said Sri Lanka should improve energy security through renewable energy investments and diversify exports towards Asian markets such as India while maintaining access to traditional destinations in Europe and the United States.

Sampath Bank Senior Economist Sanjaya Ariyawansa highlighted the need to improve tax administration, broaden the tax base by integrating more small and medium enterprises into the formal system and strengthen fiscal oversight.

He warned that climate-related risks could have significant implications for agriculture, energy, public finances and financial sector stability.

Participants at the discussion said stronger institutions, improved implementation capacity and better utilisation of public investment allocations would be critical to translating policy recommendations into sustained growth.

The economists said durable economic expansion would require coordinated reforms in macroeconomic management, trade policy, public investment, fiscal governance and climate resilience, while maintaining policy consistency amid continued domestic and global uncertainties. (Colombo/Oct22/2026)

Bonds & Forex

Sri Lanka rupee closes weaker at 332.20/35 to US dollar spot, bond yields edge up

Thursday October 22, 2026 9:36 pm

ECONOMYNEXT – Sri Lanka’s rupee closed weaker at 332.20/35 to the US dollar in the spot market on Thursday, from 331.90/332.05 the previous day, while bond yields closed steady to higher on selected tenors, dealers said.

A bond maturing on 15.09.2029 closed flat at 11.05/15 percent.

A bond maturing on 01.08.2030 closed at 11.55/60 percent, up from 11.50/60 percent.

A bond maturing on 15.10.2030 closed at 11.60/70 percent, up from 11.55/65 percent.

A bond maturing on 01.12.2031 closed at 11.90/12.00 percent, up from 11.80/90 percent.

A bond maturing on 15.01.2033 closed at 12.20/25 percent, up from 12.13/18 percent.

A bond maturing on 15.10.2034 closed at 12.40/50 percent, up from 12.30/40 percent. (Colombo/Oct22/2026)

Markets

Sri Lanka stocks close down; ASPI drops 1-pct, turnover at Rs1.1bn

Thursday October 22, 2026 4:15 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Thursday, CSE data showed, with the benchmark All Share Price Index falling 1.05 percent.

The ASPI was down 209.38 points at 19,717.92, while the more liquid S&P SL20 fell 0.68 percent, or 38.43 points, to 5,618.48.

Positive contributors to the ASPI were Ceylon Tobacco Company (up 0.67 percent at 1,795.50 rupees), The Kandy Hotels Company (up 7.77 percent at 11.10 rupees), Asia Asset Finance (up 3.89 percent at 42.70 rupees), and Resus Energy (up 5.06 percent at 8.30 rupees).

Distilleries Company of Sri Lanka (down 3.60 percent at 50.90 rupees), Hatton National Bank (down 1.20 percent at 369.75 rupees), Dialog Axiata (down 0.93 percent at 42.40 rupees), Singer Sri Lanka (down 3.67 percent at 68.20 rupees), and Commercial Bank of Ceylon (down 0.38 percent at 196.25 rupees) were top negative contributors.

Market turnover was 1.10 billion rupees. The banking sector led turnover with 249.91 million rupees, followed by capital goods with 240.14 million rupees. Crossings totaled 155.78 million rupees, coming from Sampath Bank (93.25 million rupees) and Commercial Credit and Finance (62.53 million rupees).

Asia Asset Finance plans to raise 2 billion rupees through an issuance of 20 million listed, rated, unsecured, senior, redeemable 5-year debentures priced at 100 rupees each, subject to regulatory approval.

Vallibel One PLC said it had increased its direct holding in The Fortress Resorts PLC to 49.93 percent after purchasing 34.74 million shares from concert parties Vallibel Leisure (Pvt) Ltd and Dhammika Perera, bringing its collective group holding alongside subsidiaries to 53.89 percent. (Colombo/Oct22/2026)