Ajith Nivard Cabraal is a Sri Lankan accountant and politician who was also the 16th Governor of the Central Bank of Sri Lanka. He is also the former State Minister of Finance, Capital Markets and State Enterprise Reforms and a former National List Member of Parliament from 2020 to 2021. He served as the Governor of the Central Bank of Sri Lanka, holding the post from 1 July 2006 until his resignation on 9 January 2015.He again became the Governor of Central Bank of Sri Lanka in September 2021, replacing W. D. Lakshman,and resigned again in April 2022.

Table of Contents

1. Introduction & Disclaimer
   Purpose of the Review and Methodological Approach
2. Major Economic Developments in 2025
   Key Policy Actions, IMF Reviews, Budget Developments and External Shocks
3. Sri Lankan Economy: Key Macroeconomic Indicators
   GDP, Inflation, Employment, External Sector, Fiscal Position and Financial Markets
4. What Happened to the Economy in 2025?
   Post-Crisis Recovery Trends and the Impact of Cyclone Ditwah
5. Economic Growth Performance (2018–2025)
   Historical Growth Trends and Structural Constraints
6. Outlook for 2026: What’s Next?
   Growth Scenarios and Key Risks
7. Inflation and Monetary Policy
   Inflation Trends, Policy Stance and Outlook for 2026
8. Fiscal Sector Performance
   Government Revenue, Expenditure, Interest Costs and Fiscal Deficit Outlook
9. Public Debt and Borrowing Dynamics
   Debt Sustainability, Interest Burden and Financing Risks
10. Interest Rates and Credit Conditions
    Treasury Yields, Lending Rates and Financial Sector Stability
11. Foreign Holdings of Government Securities
    Portfolio Flows, Risks and Sustainability
12. Balance of Payments and External Sector
    Trade, Services, Remittances and Overall BOP Outlook
13. Foreign Direct Investment (FDI)
    Trends, Constraints and Strategic Priorities
14. Exchange Rate Developments
    LKR Performance, Pressures and Forecast for 2026
15. Foreign Reserves Position
    Reserve Adequacy, Composition and Risks
16. Worker Remittances
    Middle East Dependence and 2026 Outlook
17. Capital Markets: Colombo Stock Exchange
    Market Performance, Valuation and Investor Sentiment
18. Commodity Prices and Trade Impact
    Oil, Tea and Global Price Movements
19. Strategic Recommendations – “To-Do” List for 2026
    Risk Management, Investment Strategy and Operational Guidance
20. Advisory and Consultancy Services
    Cabraal Advisory Plus – Service Offerings and Contact Information