In 2025, Sri Lanka, under the governance of the National People’s Power (NPP), experienced significant challenges and developments. The year was marked by efforts to stabilize the economy following the 2022 crisis, alongside ambitious reforms. However, these efforts were severely impacted by the devastating Cyclone Ditwah in late November.
FINANCIAL CHRONICLE’s comprehensive coverage highlighted the year’s blend of optimism in tourism, growth forecasts, progress backed by the International Monetary Fund (IMF), and fiscal improvements, which were ultimately overshadowed by disaster. Here are the pivotal events that shaped 2025:
January 14: President Anura Kumara Dissanayake embarked on a four-day official visit to China, engaging with President Xi Jinping, Premier Li Qiang, and other officials to strengthen bilateral relations. Sri Lanka signed 15 agreements, including a renewed USD 1.4 billion Yuan currency swap and a USD 3.7 billion investment deal with Sinopec for a new oil refinery.
January 22: DFCC Bank sold its 50 percent stake in Acuity Partners (Pvt) Ltd to Hatton National Bank for 6.5 billion rupees, following approval by the Securities and Exchange Commission of Sri Lanka.
February 9: A cascading power failure occurred, with the Ceylon Electricity Board Engineers’ Union citing the grid’s inability to handle shocks from increased rooftop solar power.
February 13: India’s Adani Group withdrew from wind power deals with Sri Lanka after the government sought renegotiation to lower the price per kilowatt-hour.
February 17: President Dissanayake presented his first full-year budget, omitting an imputed rental income tax but relying heavily on vehicle import revenue.
March 1: The IMF approved a USD 334 million tranche under Sri Lanka’s EFF program, stressing the need for continued reforms and improved tax collections.
March 7: Sri Lanka signed agreements to restructure 369 billion yen (USD 2.5 billion) with Japan.
March 19: Police Chief Deshabandu Tennakoon surrendered to court after evading arrest for a 2023 shooting incident.
April 3: US President Donald Trump imposed a 44 percent tax on Sri Lanka, citing reciprocal measures against perceived high taxes on US products.
April 4: Indian Prime Minister Narendra Modi announced the conclusion of Indian debt restructuring with Sri Lanka.
May 6: Sri Lanka held a nationwide Local Government election after seven years, with the ruling NPP winning most seats but not an outright majority.
May 23: The Central Bank reduced its policy rates by 25 basis points, responding to lower-than-expected inflation.
June 17: An agreement with France was signed to reschedule a 390 million euro debt until 2042.
June 23: Harshana Suriyapperuma was appointed Secretary to the Treasury, and UN High Commissioner for Human Rights Volker Türk visited Sri Lanka.
July 2: The IMF approved the fourth review under an Extended Fund Facility for Sri Lanka, releasing USD 350 million.
July 24: Sri Lanka’s Supreme Court ordered a USD 1 billion compensation for the X-Press Pearl disaster affecting marine life.
July 28: Sri Lanka Customs detained 1,000 Chinese-made BYD electric vehicles over motor capacity discrepancies.
August 1: The US revised the reciprocal tariff for Sri Lanka to 20 percent.
August 2: The City of Dreams integrated resort was launched in Colombo, aiming to elevate the city’s tourism market.
August 5: Inspector General of Police Deshabandu Tennakoon was removed from his post after a parliamentary vote.
August 22: Former President Ranil Wickremesinghe was arrested for alleged misuse of public funds.
September 4: Sri Lanka decided to liquidate 33 inactive state enterprises.
September 19: S&P Global Ratings upgraded Sri Lanka’s sovereign rating to CCC+ from Selective Default.
October 9: The IMF reached a staff-level agreement on the fifth review under Sri Lanka’s extended fund facility arrangement.
November 4: The Cabinet decided against implementing wind power projects in Mannar, except for three private sector initiatives.
November 7: President Dissanayake presented the 2026 budget, projecting revenue close to 16 percent of GDP and reducing debt to around 96.8 percent of GDP.
November 20: SriLankan Airlines restructured its defaulted bonds, and Cyclone Ditwah devastated Sri Lanka, resulting in over 800 casualties.
December 5: President Dissanayake announced a relief package for those affected by Cyclone Ditwah.
December 19: The IMF approved emergency financing of USD 206 million under the Rapid Financing Instrument following the cyclone disaster.
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